Regarding the values of dividends and rates, what do they account for?
Understand the Problem
The question is asking what dividends and rates are used to account for in a financial context. Options A through D present different possibilities related to remuneration and debts, equities, capital, and work.
Answer
Dividends account for a company's profits distributed to shareholders, while the dividend rate is the percentage of a stock's price that shareholders receive annually.
Dividends account for a portion of a company's profits distributed to its shareholders, typically as cash payments. The dividend rate indicates the percentage of a stock's price that shareholders receive annually in dividends.
Answer for screen readers
Dividends account for a portion of a company's profits distributed to its shareholders, typically as cash payments. The dividend rate indicates the percentage of a stock's price that shareholders receive annually in dividends.
More Information
Dividends provide investors with a return on investment, without them having to sell their investment. They are especially helpful to investors, as they can provide a regular income stream.
Tips
It's important to distinguish between the dividend itself (the payment) and the dividend rate (the yield).
Sources
- What Is a Dividend and How Do They Work? - NerdWallet - nerdwallet.com
- Dividend Rate Definition, Formula & Explanation - Investopedia - investopedia.com
- What are dividends? - cnbc.com
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