A share in a pro rata distribution (as of profits) to stockholders.a.Dividendb.Insurancec.Bondd.Tax
Question
A share in a pro rata distribution (as of profits) to stockholders.
- a. Dividend
- b. Insurance
- c. Bond
- d. Tax
Solution
The correct answer to the question regarding what a share in a pro rata distribution to stockholders is called is:
a. Dividend
In finance, a dividend is a payment made by a corporation to its shareholders, typically from its profits. Shareholders receive dividends based on the number of shares they own, which makes it a pro rata distribution of the company's earnings. Dividends can take the form of cash payments or additional shares, and they serve as a way for companies to share their success with investors. Other options, such as insurance, bonds, and tax, do not pertain to the distribution of profits to stockholders.
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