Question

Shareholders receive __________ from the company as a benefit against their investment.

• A. Interest
• B. Commission
• C. Profit
• D. Dividend

Hint:

* Debt holders receive Interest (Fixed). * Equity holders receive Dividends (Variable based on profit).

Answer 1

The Correct Option is D

Step 1: Understanding the Concept:
Shareholders are owners of a joint-stock company who provide capital. The return they receive on their investment is a portion of the company's profit.
Step 2: Detailed Explanation:
- Interest (A) is the return paid to creditors or debenture holders.
- Commission (B) is usually paid for services like underwriting or sales.
- Profit (C) is the surplus remaining after all expenses; while shareholders technically "own" the profit, the specific part distributed to them is called Dividend.
- Dividend (D) is the legally defined portion of the company's divisible profit paid to shareholders.
Step 3: Final Answer:
The specific benefit received is Dividend.