Dividend

A dividend is a payment made per share, to a company´s shareholders by a company, based on the profits of the year, but not necessarily all of the profits, arrived at by the directors and voted at the company´s annual general meeting. A company can choose to pay a dividend from reserves following a loss-making year, and conversely a company can choose to pay no dividend after a profit-making year, depending on what is believed to be in the best interests of the company. Keeping shareholders happy and committed to their investment is always an issue in deciding dividend payments. Along with the increase in value of a stock or share, the annual dividend provides the shareholder with a return on the shareholding investment.

Updated On: 09.08.09