Dividend

Definition

A distribution a company makes to its shareholders, usually in cash or additional shares. Dividends are not guaranteed and can be reduced or stopped.

Cash dividends are usually announced as an amount per share. The total a shareholder receives depends on how many eligible shares they hold. Companies can declare regular dividends, make a one-time payment, or change the amount as their finances and priorities change.

Example

Company A pays a cash dividend of $0.50 per share. If you own 10 shares on the relevant date, you receive $5.