What is the term for a distribution of money made by a corporation to its shareholders?

Study for the Liberty Tax School Test with flashcards and multiple choice questions. Each question includes hints and explanations to help you understand. Prepare effortlessly and excel in your exam!

The term that refers to a distribution of money made by a corporation to its shareholders is "dividend." Dividends represent a portion of a company's earnings that is returned to its shareholders as a reward for their investment in the company. When a corporation earns profits, it can either reinvest those earnings back into the business for growth or distribute a portion of them to shareholders in the form of dividends. This distribution typically reflects a company's profitability and is often paid out on a regular schedule, such as quarterly or annually.

The other terms listed are relevant in different contexts but do not specifically refer to the payment made to shareholders. "Disposition" generally refers to the transfer of ownership of an asset. "Earnings" signify the profits that a company generates but do not imply distribution to shareholders. "Equity" refers to ownership interest in a company or asset, representing the value of shares issued to shareholders and not necessarily the actual cash payments received. Therefore, "dividend" is the most accurate term for this type of distribution.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy