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LSDefine
Simple English definitions for legal terms
dividend
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A quick definition of dividend:
Dividend: When a company makes a profit, it can choose to give some of that money to the people who own shares in the company. This is called a dividend. The company's board of directors decides whether to give out dividends or keep the money to invest in the company. Dividends are usually given out every three months and can be a set amount of money or a percentage of the stock price. The more shares you own, the more money you get. Dividends can also help you figure out how much a stock is worth.
A more thorough explanation:
Dividends are payments made by a corporation to its shareholders from its profits. The board of directors decides whether to pay dividends or reinvest the profits back into the company. Dividends are usually paid out quarterly and can be a flat amount or a percentage of the stock price. The more shares a shareholder owns, the more dividends they will receive.
Company A has issued dividends of $1 per share. If a shareholder owns 100 shares, they will receive $100 in dividends.
Dividends can also be used to estimate the value of a stock through the dividend discount model. This model calculates the present value of all future dividends to determine the stock's worth.
Overall, dividends are a way for shareholders to receive a portion of a company's profits and can be a valuable tool for investors to evaluate the worth of a stock.