Monday, September 24, 2018

What is a 'Dividend'?

A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
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TERM OF THE DAY
Dividend
A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, paid to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property.
Breaking it Down:
The board of directors can choose to issue dividends over various timeframes and... Read More
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Related Definitions
Dividend Yield
A financial ratio that shows how much a company pays out in dividends each year relative to its share price. Read More
Dividend Signaling
A theory that suggests company announcements of an increase in dividend payouts act as an indicator of the firm possessing strong future prospects. Read More
Target Payout Ratio
A target payout ratio is a measure of what size a company's dividends should be. Firms generally tie their target payout ratio to long-run, sustainable earnings. Read More
Equalizing Dividend
An additional dividend paid to eligible stockholders when their divided income is reduced due to a change the board of directors makes to the dividend payment schedule. Read More
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