What is Dividend : A dividend can be described as a reward that publicly-listed companies extend to their shareholders, and its source is the company’s net profit. Such rewards can either be in the form of cash, cash equivalent, shares, etc and are mostly paid from the remaining share of profit once essential expenses are met. A company’s board of directors decides the rate of dividends, wherein, the approval of majority shareholders is also factored in. However, companies may decide to retain their accumulated profits to reinvest in the business or reserve it for future use. Further, announcements about dividend income declaration mostly accompany a significant change in the company’s stock value. Investors who own shares in a company that pays dividends can benefit from regular income streams, as well as potential long-term growth in the value of their investments. However, it's important to note that not all companies pay dividends, and even those that do may change their divi...
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