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. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Term of the Day | Words to Know Dividend A dividend is the distribution of reward from a portion of the company's earnings and is paid to a class of its shareholders. Dividends are decided and managed by the company's board of directors, though they must be approved by the shareholders through their voting rights. Dividends can be issued as cash payments, as shares of stock, or other property, though cash dividends are the most common. Along with companies, various mutual funds and exchange traded funds (ETF) also pay dividends. Read More » Related to "Dividend" How Dividends Affect Stock Prices Find out how dividends affect the underlying stock's price, market psychology, and how to predict price changes after dividend declarations. Read More » How and When Are Stock Dividends Paid Out? A dividend is determined quarterly after a company finalizes its income statement. Dividends are paid either by check or in additional shares of stock. Read More » How to Use the Dividend Capture Strategy Learn how to implement the dividend capture strategy, an aggressive, income-focused stock trading strategy investors can use to increase profits. Read More » Related Definitions Board of Directors A board of directors is a group of individuals elected to represent shareholders and establish and support the execution of management policies. Read More » Stockholder Voting Right A voting right is the right given to a stockholder to vote on matters of corporate policy. It is common for votes to be voiced by proxy. Read More » Retained Earnings Retained earnings are the cumulative net earnings or profit of a firm after accounting for dividends. Some people refer to them as the earnings surplus. Read More » Payment Date The payment date is the date set by a company when it will issue payment on the stock's dividend. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC, All Rights Reserved | Privacy Policy