Dividend

Definition of Dividend

Dividend refers to distribution of profits made by a corporation to its shareholders, typically in the form of cash or additional shares.

It represents a portion of company earnings that is returned to investors as a reward for their ownership and investment in the company.

Dividends are often declared by the company's board of directors and distributed based on the number of shares held by each shareholder.

What is Dividend?

Dividend is the monetary or stock-based payment that a company distributes to its shareholders as a share of its profits.

It is a way for companies to share financial success with their investors and provide a tangible return on their ownership.

Dividends reflect a company's financial health and management's confidence in sustaining profitability.

Types of Dividend

Cash Dividend

The most common type, where shareholders receive a cash payment per share from company profits.

Stock Dividend

Shareholders receive additional shares of stock instead of cash, increasing their ownership.

Special Dividend

A one-time, extra dividend payment often resulting from exceptional profits or windfalls.

Dividend Reinvestment Plan (DRIP)

Allows shareholders to automatically reinvest dividends to purchase more company shares.

Property Dividend

Shareholders receive non-cash assets, such as company products or subsidiary shares.

Liquidating Dividend

Occurs when a company sells assets and distributes the proceeds to shareholders.

Scrip Dividend

Shareholders receive promissory notes or IOUs indicating a future cash payment.