Final answer:
Cash dividends are the most commonly distributed form of dividends, providing a direct way for shareholders to receive a portion of a corporation's profits.
Step-by-step explanation:
The most common form of dividends is cash dividends. A cash dividend is a direct payment made by a company to its shareholders as part of the profit-sharing mechanism of the corporation. This is one way in which shareholders can earn a return on their investment, alongside potential capital gains from selling the stock at a higher price than it was purchased.
Dividends are not the only return on investment; they exist alongside the possibility of capital gains, which occur when one sells an asset for more than the purchase price. However, dividends provide a direct and tangible return to investors, often on a regular basis, such as quarterly or annually. It's important for investors to understand both dividends and potential capital gains when evaluating the present discounted value of any investment to make informed decisions based on future prospects.