Dividend

A dividend is a payment made by a company to its shareholders, usually in the form of cash or additional shares, as a reward for their investment in the company. Dividends are typically paid out from the company’s profits and are distributed on a regular basis, such as quarterly or annually. Companies that generate consistent profits often issue dividends to provide a return to shareholders. Dividends can also signal a company’s financial health, as only profitable or financially stable companies are typically able to offer regular payouts to their investors.

Example

A company declares a dividend of $1 per share, meaning shareholders will receive $1 for each share they own.