Please explain it, all the information I come across seem to have completely different answers.
The company’s board of directors decides what to do with the corporation’s net earnings.
?Some or all of the earnings may be re-invested in the company so it can grow, open new stores or make repairs. When this is done, the earnings money is used up but the company is more valuable by that same amount.
The per share price, having increased because of the earnings, retain that increase when the earnings are re-invested in the company.
?Some or all of the earnings may be given directly to the shareholders and this is called a DIVIDEND. If you own stock in the company, they just mail you a check or send the money to your brokerage account. This makes the price of the stock decrease by the same amount as the dividend, so you have the same value in the total of stock and dividends.
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No, selling shares solely for stock price profit is called capital gains.
Dividends are when, on a regular or irregular basis, the company issues cash or share payouts (called dividends) for the number of shares you own, prior to the ex-dividend date. They are free "bonuses" that companies offer if they believe they're well off, and want to give back to the investors (to entice further investment).
You can learn about how dividend investing works at sites like Investopedia.
Stock market is mainly about investing in companies.
Companies hopefully make profits.
Some profit is retained for the business and some profit is distributed to sghareholdersd (dividends).
If more people see theis profit increasing in future years there will be more buyers and sellers and the price or value will rise leading to capital appreciation. Two for the price of one: income & growth!
When you own a company, your main purpose of owning it is to get that profit from when you sell junk for $200 that only costs you $120 to make. Great, as an owner you get that $80 profit.
Well, when you are talking about a giant company like GE, with billions of dollars of sales and profits, how do you actually get that money, if you only own 100 shares of GE, representing a small slice of the overall ownership? Its called a dividend. Your chosen leaders that represent the shareholders (the Board of Directors) decide how much of the profit they will distribute. They divide that up among all the shares outstanding, and each share gets that 'dividend'.
Its really all you get when you buy a stock. You get the dividends. If you buy the stock for $10, and the dividend is $1 per year, then in 10 years you break even. Every year after is gravy, AND if you are lucky you'll still be able to sell that stock at a higher price than the $10 you paid for it.
Very simply it's your share of the companies profits.
Dividends are your share of monies a company decides to distribute to its shareholders based on the extent of your shareholding. Ideally, they should be covered by the company's profits, paid regularly and consistently.
The company declares how much it is to distribute to its shareholders and you can work out how much that is per share by dividing the total amount distributed by the total number of shares issued. And you can work out the percentage of return you get by dividing the amount per share you get by the cost per share to you.
Is that the money you make from selling a share or something?
Please explain it, all the information I come across seem to have completely different answers.
