Dividend
Also called: dividends
A payment of part of a company's profits to its shareholders, declared by the board, with the same amount paid on every share.
When a company makes profits, its board decides how much to keep for the business and how much, if any, to pay to shareholders as dividends. Every share of the same class receives the same amount.
Dividends are not guaranteed. Companies can raise, cut or stop them, and many fast-growing companies pay none, preferring to reinvest their profits.
Example
A company declares a dividend of ₹8 per share. If you own 250 shares on the record date, you receive ₹2,000 (before any tax).
Learn more in these lessons
- Dividends, capital gains and lossesHow do you make or lose money from shares?
- What is a share?What does owning a share actually mean?
- Dividends, splits, bonus shares and other corporate actionsWhat happens to my shares in a split, bonus issue or rights issue?
- Dividend payout and coverageHow can you tell whether a company's dividend is sustainable?
- Tax on shares, funds and other investmentsHow are different investments taxed, and what changes the tax you pay?
Related terms
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