Dividends represent a portion of a company's earnings paid out to its shareholders. These payments are typically made regularly, providing a direct return on...
A dividend is a distribution of a portion of a company's earnings, decided by its board of directors, to its shareholders. It is typically paid out as cash, but can also be in the form of additional stock or other assets.
Companies pay dividends to return profits to shareholders, reward investor loyalty, and signal financial stability. It can also attract income-focused investors and serve as an effective capital allocation strategy.
Dividends are commonly paid quarterly, though some companies pay monthly or annually. Shareholders generally receive payments directly into their brokerage accounts, or they can choose to reinvest them in additional shares.
Yes, dividends are generally subject to income tax. The specific tax rate depends on the investor's tax bracket and whether the dividends are classified as "qualified" (taxed at capital gains rates) or "non-qualified" (taxed as ordinary income).