BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Interest
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Dividend
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Tax
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Earnings
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Detailed explanation-1: -A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-invested in the business (called retained earnings).
Detailed explanation-2: -The IRS instead treats it as a percentage of the business’s profits. Therefore, dividends are not taken into account when calculating the stock’s original cost. A distribution, as opposed to a dividend, is a cash payment made by a mutual fund or a small business that is incorporated as an S corporation.
Detailed explanation-3: -Dividends can be issued as cash payments, as shares of stock, or other property. So, we can say that a share of a company’s net profit distributed by the company to its stockholders is called dividend.