Final answer:
The statement that corporations primarily distribute profits through dividends is true. Dividends are the portion of profits distributed to shareholders, with the amount received based on the number of shares owned. These decisions are made by management or a board of directors, depending on whether the company is public or private.
Step-by-step explanation:
Corporations distribute profits primarily through dividends. This statement is True. Dividends are payments made to shareholders as a distribution of the company's earnings. For example, if a stock pays a dividend of 75 cents a share, a stockholder owning 85 shares will receive a total dividend. Stable companies, such as Coca-Cola and electric companies, often provide dividends, with investors sometimes holding onto these stocks for many years.
Decisions about when to issue stock, pay dividends, or reinvest profits are made by the company's management, which can vary between private and public firms. The decision-makers, typically the board of directors in public companies, consider various factors, including the company's profitability, its need for capital, and the shareholders' expectations, when determining dividend payments.