Which of the following pays dividends?

The correct answer is that common stock pays dividends. Dividends are payments made to shareholders out of a company's profits and are typically distributed on a regular basis, such as quarterly or annually. Companies issue common stock to raise capital, and in return for the investment, shareholders have the potential to receive dividends as well as enjoy price appreciation of their shares.

Common stock represents ownership in the company, and shareholders may receive dividends when the company decides to distribute a portion of its earnings, reflecting the company's profitability. This aspect of common stock is an essential part of investing, as dividends can provide a source of income for investors in addition to potential increases in the stock's market value.

In contrast, options contracts and warrants are derivatives that do not entitle holders to receive dividends directly. Options provide the right but not the obligation to buy or sell an underlying asset at a predetermined price, while warrants are similar to options but generally issued as part of a bond offering. Unit Investment Trusts (UITs), while they may distribute income derived from their underlying assets, do not directly issue personal dividends like common stock does but may instead distribute interest and other income derived from the UIT's investments.