dividend
Sign in to saveA dividend is the distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-invested in the business (called retained earnings). The current year's profit as well as the retained earnings of previous years are available for distribution; a corporation is usually prohibited from paying a dividend out of its capital. Distribution to shareholders may be in cash (usually by bank transfer) or, if the corporation has a dividend reinve
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A dividend is a payment that a corporation makes to its shareholders from its profits. Companies can choose to distribute some of their earnings to shareholders as dividends or reinvest the money back into the business, which gives shareholders a direct financial benefit from owning company stock.
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Article
20 sectionsContents
- History
- Forms of payment
- Payout ratio
- Dividend dates
- Dividend frequency
- Dividend reinvestment
- Law and government policy on dividends
- Australia and New Zealand
- India
- United States and Canada
- United Kingdom
- Effect on stock price
- Criticism and analysis
- Tax implications
- Other corporate entities
- Cooperatives
- Trusts{{anchor|Dividends from trusts}}
- See also
- References
- External links
A dividend is the distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-invested in the business (called retained earnings). The current year's profit as well as the retained earnings of previous years are available for distribution; a corporation is usually prohibited from paying a dividend out of its capital. Distribution to shareholders may be in cash (usually by bank transfer) or, if the corporation has a dividend reinvestment plan, the amount can be paid by the issue of further shares or by share repurchase. In some cases, the distribution may be of assets.
The dividend received by a shareholder is treated as the income of the shareholder and may be subject to income tax (see dividend tax). The tax treatment of this income varies considerably between jurisdictions. The corporation does not receive a tax deduction for the dividends it pays.