Quick Definition

A dividend is a portion of a company's earnings distributed to its shareholders, typically in the form of cash or additional stock.

Examples

• 1A company might declare a quarterly dividend of $0.50 per share, meaning a shareholder owning 100 shares would receive $50.
• 2During special financial periods, a company may issue a special dividend in addition to the regular dividends as a one-time benefit.
• 3Companies in stable industries like utilities often provide consistent dividends, making them attractive to income-focused investors.
• 4Reinvesting dividends through a dividend reinvestment plan (DRIP) allows shareholders to purchase more shares, compounding their investment returns over time.

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