Profit distributed among shareholders is called?a)Retained earningsb)D...
Correct answer is option B) Dividend
Explanation:
The profit distributed among shareholders is called a Dividend.
Dividends refer to the distribution of a company's earnings, either in cash or additional shares, to its shareholders. These payments are made from the company's retained earnings or net income. Dividends are typically paid out periodically (e.g., quarterly) and are an essential aspect of investing in stocks for many investors, as they provide a steady stream of income.
In summary, dividends are the profits distributed among shareholders, retained earnings are the portion of a company's net income that is not paid out as dividends and is reinvested in the company, and debentures are unsecured debt instruments used to raise capital.
Profit distributed among shareholders is called?a)Retained earningsb)D...
The correct answer is option 'B' - Dividend.
Dividend is the profit distributed among shareholders of a company. It represents the portion of the company's earnings that is distributed to the shareholders as a return on their investment. The distribution is usually made in the form of cash, but it can also be in the form of additional shares or other assets.
Dividends are typically paid out of the company's retained earnings, which are the accumulated profits of the company that have not been distributed to shareholders in the past. However, it is important to note that not all companies distribute dividends. Some companies may choose to retain all of their earnings for reinvestment in the business or other purposes.
Dividends are usually declared by the company's board of directors and approved by the shareholders. The amount of dividend to be distributed is determined by various factors, including the company's profitability, financial health, cash flow, and future investment needs.
Dividends are an important way for shareholders to receive a return on their investment in the company. They provide a regular income stream for investors and can also be an indicator of a company's financial strength and stability. Companies that consistently pay dividends are often seen as more reliable and attractive to investors.
It is important to note that dividends are not guaranteed and can vary from year to year. The decision to pay dividends and the amount of dividends paid can be influenced by various factors, including the company's performance, economic conditions, and management's assessment of future prospects.
In conclusion, dividend is the profit distributed among shareholders of a company. It represents a return on their investment and is typically paid out of the company's retained earnings. Dividends are an important way for shareholders to receive income and can also be an indicator of a company's financial strength.