When It Distributes a Portion of Its Income to Shareholders

question 98

Multiple Choice

When it distributes a portion of its income to shareholders in the form of cash payments, a corporation pays out _____.

• A)dividends
• B)shares
• C)allotments
• D)capital surpluses

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Definitions:

Divisible Contract

An agreement comprising multiple promises or parts that can be separated and independently executed or enforced.

Consideration

Something of value exchanged between parties in a contract, making the agreement legally binding.

Enforceable Contract

A legally binding agreement capable of being upheld and imposed in a court of law.

Competition

The rivalry among businesses to attract customers, increase sales, and improve market share.