Dividends are best defined as: \( \begin{array}{l}\text { a. cash or stock payments to either bondholders or shareholders. } \\ \text { b. cash payments to shareholders. } \\ \text { d. cash or stock payments to shareholders. } \\ \text { e. cash payments to either bondholders or shareholders. }\end{array} \)

To determine the best definition of dividends from the provided options, let's analyze each choice: - **a. cash or stock payments to either bondholders or shareholders.** This option is incorrect because dividends are specifically payments made to shareholders, not bondholders. - **b. cash payments to shareholders.** This option is partially correct, as dividends can be cash payments, but it does not include stock dividends. - **d. cash or stock payments to shareholders.** This option is correct because dividends can indeed be distributed in the form of cash or stock to shareholders. - **e. cash payments to either bondholders or shareholders.** This option is incorrect for the same reason as option a; dividends are not paid to bondholders. Based on this analysis, the best definition of dividends is: **d. cash or stock payments to shareholders.**