Which of the following statements is correct?
A) There is one potential source of cash flows from owning a stock.
B) There are two potential sources of cash flows from owning a stock.
C) There are three potential sources of cash flows from owning a stock.
D) There are more than three potential sources of cash flows from owning a stock.

Question

Quizplus · Accepted Answer

There are two potential sources of cash flows from owning a stock: dividends and capital gains. Dividends represent a portion of a company's profits that are paid out to shareholders, while capital gains reflect an increase in the value of the stock that can be realized if the investor sells the stock at a higher price than they paid for it.

Which of the Following Statements Is Correct