What term describes profits paid to corporate shareholders based on the number of shares they own?

What term describes profits paid to corporate shareholders based on the number of shares they own?

• A. Patronage refunds
• B. Dividends
• C. Royalties
• D. Interest payments

Answer: (B)

Dividends are profits paid to corporate shareholders based on the number of shares they own. They reflect a share of the company’s earnings distributed to owners, typically issued per share and sometimes as cash or additional stock. The more shares you hold, the larger your payout, since your ownership stake is proportional to your share count. Patronage refunds go to cooperative members based on their purchases, not to corporate shareholders. Royalties are payments for using someone else’s property or rights, often tied to usage, and interest payments go to lenders. So dividends best describe profits allocated to shareholders according to how many shares they own.

Dividends are profits paid to corporate shareholders based on the number of shares they own. They reflect a share of the company’s earnings distributed to owners, typically issued per share and sometimes as cash or additional stock. The more shares you hold, the larger your payout, since your ownership stake is proportional to your share count. Patronage refunds go to cooperative members based on their purchases, not to corporate shareholders. Royalties are payments for using someone else’s property or rights, often tied to usage, and interest payments go to lenders. So dividends best describe profits allocated to shareholders according to how many shares they own.