Dividends

A dividend is part of the reward to shareholders, determined by the Board of Directors. When the Dividend per Share is divided by the Share Price, this gives the Dividend Yield, expressed as a percent.

The Net Profit of a company can be held for future investment (e.g., CAPEX) or distributed to Shareholders. The portion that is distributed to Shareholders is the Dividend. The Dividend is determined by the Board of Directors and is part of the reward to shareholders, maybe by around 1/3. A Cash Dividend is not the only way to pay Dividends. A Dividend Reinvestment Plan could be offered. The Dividend is announced on a per Share basis. If the quoted value of the Dividend is divided by the quoted Share Price, this will give a Dividend Yield, expressed as a percent. The Dividend offered to Shareholders can vary, while Dividends on Preferred Stock are a prescribed amount. If the Dividend on a Preferred Stock is not paid, it will accumulate and take precedence over dividends paid on Common Stock. Dividends are paid Semi Annually or Annually.