All or part of a firm's profits may be paid out to the firm's stockholders in the form of
A)retained earnings.
B)dividends.
C)interest payments.
D)capital accounts.

Question

Quizplus · Accepted Answer

Dividends are payments made by a firm to its stockholders as a distribution of all or part of the profits. Retained earnings, on the other hand, are profits that are kept by the company and reinvested in the business. Interest payments are paid to debt holders, not stockholders, and capital accounts refer to the equity accounts on a company's balance sheet, but do not necessarily involve profit distributions.

All or Part of a Firm's Profits May Be Paid