DECA Marketing Cluster Practice Exam 2025 – Your All-in-One Guide to Achieve Exam Success!

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What term describes a sum of money paid regularly to shareholders from profits?

Dividend

The term that describes a sum of money paid regularly to shareholders from profits is "dividend." Dividends are payments made by a corporation to its shareholders, usually as a distribution of profits. When a company earns a profit or surplus, it can decide to reinvest it in the business, pay down debt, or distribute a portion of it to shareholders in the form of dividends. This practice incentivizes shareholders to invest in the company, as they receive a return on their investment without needing to sell their shares.

In contrast, commission refers to a fee paid to agents or employees based on the sales they generate, salary represents regular compensation paid to employees for their work, and a bonus is a one-time financial reward given to employees, often based on performance or company profitability, rather than a consistent return to shareholders.

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Commission

Salary

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