What Is Dividend?

A payment made by a corporation to its shareholders from its profits.

A dividend is a payment made by a company to its shareholders out of its profits or earnings. This payment represents a portion of the company's profits that are distributed to the shareholders as a return on their investment in the company.

Dividends are typically paid in cash, although they can also be paid in the form of additional shares of stock or other types of assets. The amount of the dividend is typically determined by the company's board of directors and is based on a variety of factors, including the company's financial performance, growth prospects, and capital needs.

Dividends can be an important source of income for investors, particularly those who are looking for regular cash flow from their investments. They can also be an indicator of a company's financial health and its commitment to sharing its profits with shareholders.