A dividend is when a company distributes a portion of its earnings to shareholders. Depending on the agreement, dividends can be paid out in cash or more stock for each shareholder.
Example: LetÂ’s say you own 100 shares of stock for a particular company. At the end of each quarter, the company will calculate how much it earned to figure out how much of a dividend theyÂ’ll pay out. If they decide that theyÂ’ll pay $0.50 per share and you have 100 of them, youÂ’ll earn $50 (100 x 0.50).
Menu