What is a dividend?
Certain companies that are listed on a stock exchange, and some investment funds, pay their shareholders as a reward for investing in the company. This is called a dividend. These dividend payments are mostly in cash but can also be in the form of more shares.
Larger, established companies tend to pay better and more regular dividends than smaller ones, seeing as the funds come from company profits. Dividend amounts and the time between payouts are decided by company directors.
Did you find this useful?