Welcome back. I am Ann Zuraw
Financial Terminology 101 continues today with a general explanation about Dividends.Dividends are payments that companies make to their stockholders based on the company’s profits. Some publicly owned companies offer dividends to their stock holders while others don’t.
As a benefit of investing in the company, companies take money that could also be reinvested back into the business — but instead — distribute it to their shareholders. Investors like to receive dividends, because they can get a guaranteed return on their investment in the form of the money.
Most companies pay dividends quarterly and they are usually paid in the form of cash or additional shares of the corporation. Some companies offer what they call dividend reinvestment plans. This means you have the option to automatically reinvest your dividend money to buy additional shares of the company.
The payment of dividends is not guaranteed. Companies may reduce or elimate the payment of dividends.
Our next topic will be dividend Yields
Keeping it simple from AZ