_________ are the firm's after-tax profits that are distributed to stockholders.Multiple ChoiceDividendsEquity capitalRetained earningsInterest payments

Break Down the Problem

1. Identify the concept being referred to in the question: the firm's after-tax profits that are distributed to stockholders.
2. Review the provided options to determine which best fits the description.

Relevant Concepts

• Dividends: These are payments made by a corporation to its shareholder members. It is typically in the form of cash or additional shares.
• Equity capital: This refers to the funds raised by a company in exchange for a share of ownership in the company.
• Retained earnings: Profits that a company has reinvested in the business instead of distributing as dividends.
• Interest payments: Expenses related to debt that a company pays to its lenders.

Analysis and Detail

• After-tax profits designate the amount of profit a firm retains after paying taxes, which can either be reinvested in the business or distributed to shareholders.
• The correct term for the profits distributed to stockholders is specifically dividends. Unlike retained earnings, which are profits kept in the business, dividends are the portions of profits given to shareholders.

Verify and Summarize

The correct answer must be one that explicitly refers to after-tax profits distributed to stockholders. In this context, “dividends” is the only term that accurately describes these distributions.

Final Answer

Dividends are the firm's after-tax profits that are distributed to stockholders.