What term describes a distribution of money to a shareholder of stock?

What term describes a distribution of money to a shareholder of stock?

• A. Dividend
• B. Commission
• C. Escheat
• D. Renunciation

Answer: (A)

Dividends are cash distributions paid to stockholders from a corporation’s earnings. They represent a return of profits to owners who hold shares, usually declared by the board and paid periodically. This fits the scenario of distributing money to a shareholder. The other terms refer to different concepts: a commission is compensation for selling something, escheat is property that goes to the state when unclaimed, and renunciation is giving up a right or interest.

Dividends are cash distributions paid to stockholders from a corporation’s earnings. They represent a return of profits to owners who hold shares, usually declared by the board and paid periodically. This fits the scenario of distributing money to a shareholder. The other terms refer to different concepts: a commission is compensation for selling something, escheat is property that goes to the state when unclaimed, and renunciation is giving up a right or interest.