A dividend is a share of the profit available to holders of equity in the company. Only a part of the profit a company makes is available to holders of equity. Equity means that you lose all value in your shares if the company shuts down after making losses. Dividend is split according to the number of shares. If dividend is $1/share then you will get $10 if you own 10 shares.
A share of stock is a share of the ownership of the corporation. Dividends are a portion of the profits of the corporation. Established companies usually pay dividends.
Shareholders own part of the company.
Company (hopefully) makes a profit.
Some of the profit may be retained (for expansion, cash flow etc.).
Some of the profit may be distributed to shareholders (after all they own the company).
This distributed profit is called DIVIDENDS.
There, that wasn't difficult, was it?
when corporations do their yearly accounting and find they have had a good year with profits, they may declare some of those profits be paid to the shareholders in the form of dividends
this is good for the investors because they realize they have not invested in a 'dead horse'
A companies profit in excess of capital gains to be paid to
the shareholders in the form of cash or to be reinvested for
more shares.
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enjoy
What is a yield as well
What is a dividend in stock investing?
