The useful idea
- The useful idea
A dividend is the distribution of profits by a corporation to its shareholders.
- How it works
When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders.
- Why it matters
Any amount not distributed is taken to be re-invested in the business (called retained earnings).
Why this matters
Use Dividend to compare the trade-offs before committing money.
Try this
Use Dividend to compare the trade-offs before committing money.
Test your recall
Which idea belongs to the explanation of Dividend?
- The useful idea — correct
- How it works
- Why it matters
A dividend is the distribution of profits by a corporation to its shareholders.
General education only — not personal financial advice.