What is defined as a distribution of earnings to shareholders of a corporation?

The correct choice is established as a distribution of earnings to shareholders of a corporation, making it the quintessential definition of a dividend. When a corporation generates profits, it can decide to share a portion of those profits with its shareholders. This sharing is executed through dividends, which can come in various forms such as cash payments or additional shares of stock. By distributing dividends, a company rewards its shareholders for their investment and signals financial health and stability.

It’s important to recognize the distinctions between the other options. For instance, bonuses generally refer to additional compensation given to employees, rather than a return on investment for shareholders. Retained earnings reflect the portion of profit a company retains for reinvestment and growth, not for distribution. Lastly, revenue represents the total income generated from operations, which has not yet been allocated as earnings to shareholders. Thus, the term dividend directly correlates to the practice of distributing earnings to owners in a straightforward manner.