Dividend

Valuation & Fundamentals

A cash payment a company makes to its shareholders out of its profits.

In the US the board of directors declares dividends, and most companies pay them quarterly. To receive a dividend you must buy the stock before the ex-dividend date; on the ex-date the share price usually opens lower by roughly the amount of the dividend.

Example

A company paying a quarterly dividend of $0.50 per share pays $2 per share a year.

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