Which of the Following Is the Best Definition of a Distribution

question 251

Multiple Choice

Which of the following is the best definition of a distribution?

• A) The market's reaction to a change in corporate dividend payout.
• B) Idea that individual investors can undo corporate dividend policy by reinvesting dividends or selling shares of stock.
• C) Date two business days before the date of record, establishing those individuals entitled to a dividend.
• D) Payment made out of a firm's earnings to its owners, either in the form of cash or stock.
• E) Payment made by a firm to its owners from sources other than current or accumulated earnings.

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Definitions:

Common Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's profits or losses.

Generally Accepted Accounting Principles

A set of widely adhered to principles and guidelines for reporting financial information.

Financial Accounting Standards Board

An independent organization responsible for establishing and improving financial accounting and reporting standards in the United States.

Net Income

The total profit of a company after accounting for all expenses and taxes; also known as net earnings or net profit.