Clara Holds Common Stock in a Telecommunications Company

Multiple Choice

Clara holds common stock in a telecommunications company. The board of directors of the company declares that each stockholder will receive 2 percent of the company's profits relative to the proportion of shares he or she holds. Thus, as a stockholder, Clara receives a sum of $4,800 out of the company's profits. In this scenario, the money that Clara has received is called _____.

A) a dividend
B) interest income
C) the principal
D) a capital gain