A distribution of profits by a corporation to its owners.

• A. Dividends
• B. Capital Gains
• C. Stock Split
• D. Ticker Symbol

Answer: (A)

Dividends are the payments a company makes to its shareholders from its earnings. When a corporation earns profits and decides to share part of that success with owners, it issues dividends, usually as cash per share or, sometimes, as additional shares.

Capital gains come from selling a stock for more than you paid, which is a profit on the investment’s price movement rather than a direct profit distribution by the company. A stock split increases the number of shares and adjusts the price, but it doesn’t provide a cash distribution of profits. A ticker symbol is simply the short code used to identify a security on an exchange, not a distribution.