Definition
Dividend is a payment to shareholders and it is made from the earnings of a company. In a way, dividend is returning wealth back to the shareholders. When a company earns profit, it has two options to exercise: (1) the company can reinvest the earnings in the business and transfer the money into its owner’s equity (called retained earnings) and (2) the company can distribute the earnings to the shareholders (called dividend).
Introduction
Dividend payments make the stocks more attractive for investors to purchase. In general, stocks provide two types of returns: (1) capital gains and (2) dividends. Only stocks give their owners/holders rights to receive dividends. Other financial instruments such as bonds, bills, and notes do not give such rights to their owners.
There are mainly three types of dividends: (1) cash, (2) stock, and (3) property dividends.
Cash dividends are in the form of cash (usually check or electric transfer) made out...
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References and Readings
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Kirkulak Uludag, B. (2013). Dividend. In: Idowu, S.O., Capaldi, N., Zu, L., Gupta, A.D. (eds) Encyclopedia of Corporate Social Responsibility. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-28036-8_33
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