2006-12-16 18:57:26 · 7 answers · asked by Tanya 1 in Business & Finance ➔ Investing
It's usually when the company decides to return some of its profits to its shareholders based upon the number of shares owned.
It's also the most common way for companies to do stock splits.
2006-12-16 19:01:35 · answer #1 · answered by feanor 7 · 0⤊ 1⤋
Dividends are the periodic payment of a share of profits to shareholders on a per share basis. Dividends are authorized by a company's Board of Directors; shareholders are forbidden from introducing resolutions re: specific amounts of dividends. Normally dividends are paid on a regular, periodic basis, most frequently quarterly in the U.S. but the frequency can vary by company and country. Even if a company has a loss for the year, it may still pay a dividend from the prior years' retained earnings. A company may occasionally pay a "special dividend" when they sell an asset or have a lot more retained earnings than needed. For example, Microsoft did this about two years ago.
The dividend is usually paid in cash but can be in the form of stock or other assets.
See Wikipedia for a more complete definition of stock dividends. (http://en.wikipedia.org/wiki/Dividend)
See Merriam-Webster for a broader definition including non-financial meanings. (http://www.m-w.com/dictionary/dividend)
2006-12-16 20:05:58 · answer #2 · answered by wgreed1 1 · 0⤊ 0⤋
I will try to answer it very professionally not amatuerish ones.
Dividends are directed by Welfare Economics prerogatives. It means every country who cares for it's citizens welfare would have created the culture for it's Corporations to pay dividends. You can refer Managerial Economics and Welfare by Baumol.
Now theoretically how much should a corporation should be planning to give it's share holders as dividend. It is the standard deviation or risk in the Return on Investment for the past 15 years.
Third corporations look into their future need and figure out how much cash is required for it and the balance left over is paid as dividends. Well planned corporations make dividend policy as an important factor or target in their planning process.
2006-12-17 05:09:37 · answer #3 · answered by Mathew C 5 · 0⤊ 0⤋
A stock dividend is a quarterly(or more) payment of a percentage of a companies profits to the stockholders, Preferred stockholders get first priority that changes based on the type of preferred stock held, while common stock holders receive dividend after preferred stockholders but have voting rights. a company need not issue dividends each quarter, but they are required by law to consider dividend payments. If there is evidence that the Board of Directors have not discussed dividends, and the firm has a profit it is possible to file a lawsuit against the company for dividends. If the board can show evidence that they discussed it they do not have to pay, but if they cannot show evidence of that then dividends will likely be issued following historic rates.
2006-12-16 19:30:20 · answer #4 · answered by nathanael_beal 4 · 0⤊ 1⤋
some % of profits of a company to pay their share holders according to thier share holding in the company. usually pay companies dividend quartely, half yearly or yearly basis
2006-12-17 05:01:57 · answer #5 · answered by udayashanker k 3 · 0⤊ 0⤋
DIVIDEND IS PAID BY THE COMPANY TO SHARE HOLDERS FOR BUYING THEIR SHARES AND KEEPING THEM
2006-12-16 20:03:13 · answer #6 · answered by Anonymous · 0⤊ 1⤋
its the fixed amount of money a bond pay you on fixed intervals
2006-12-16 19:02:56 · answer #7 · answered by AMMAR O 1 · 0⤊ 0⤋