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When a payment is made from a firm's earnings to its owners in the form of cash, it is called a ___.

User Fteinz
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Final answer:

A cash payment made from a firm's earnings to its owners is called a dividend, which is a type of rate of return for shareholders.

Step-by-step explanation:

When a payment is made from a firm's earnings to its owners in the form of cash, it is called a dividend. Dividends are a way in which a company distributes a portion of its profits to shareholders. They represent a direct payment and serve as an income for investors, acting as a form of rate of return on the investment in the firm's stock. Another form of return on investment is a capital gain, which occurs when an investor sells their shares for a higher price than the original purchase price, thereby realizing a profit on the difference.

User Yonatan Karni
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