Feb 02 2011

What is a dividend?

Category: Finance


A dividend is a payment (usually cash or stock) that is issued by a corporation to its shareholders. They are often paid on a fixed schedule and are determined on a per share basis. When a corporation earns a profit, those funds will often be used to re-invested in the business itself (retained earnings) or used to pay their shareholders a dividend. Some companies will even do both. Companies that pay dividend are located in a number of market sectors including utilities, banking, and consumer goods.

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