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Related to Dividend: Dividend yield


A portion of a company's profit paid to common and preferred shareholders. A stock selling for $20 a share with an annual dividend of $1 a share yields the investor 5%.


A portion of a publicly-traded company or fund's earnings that is distributed to shareholders. The amount of earnings distributed as dividends is usually determined by the board of directors and divided by the number of shares, but preferred stock often has guaranteed dividends. Dividends exist in order to encourage investment in the company and to allow shareholders (who are really co-owners) to participate in the profits. A rapidly expanding company often pays little or nothing in dividends, as most of its earnings are reinvested in the company. On the other hand, a well-established company with solid profits likely pays relatively high dividends.


A share of a company's net profits distributed by the company to a class of its stockholders. The dividend is paid in a fixed amount for each share of stock held. Although most companies make quarterly payments in cash (checks), dividends also may be in the form of property, scrip, or stock. Unlike interest on a debt, dividends must be voted on by the company's directors before each payment. See also bond dividend, capital dividend, cash dividend, consent dividend, constructive dividend, declaration date, declared dividend, ex-dividend date, final dividend, illegal dividend, interim dividend, liability dividend, liquidating dividend, optional dividend, stock dividend.


Corporations may pay part of their earnings as dividends to you and other shareholders as a return on your investment. These dividends, which are often declared quarterly, are usually in the form of cash, but may be paid as additional shares or scrip.

You may be able to reinvest cash dividends automatically to buy additional shares if the corporation offers a dividend reinvestment program (DRIP).

Dividends are taxable unless you own the investment through a tax-deferred account, such as an employer sponsored retirement plan or individual retirement account. That applies whether you reinvest them or not.

However, dividends on most US and many international stocks are considered qualifying dividends. That means you owe tax at your long-term capital gains rate, provided you have owned the stocks the required length of time.

Dividends on real estate investment trusts (REITs), mutual savings banks, and certain other investments aren't considered qualifying and are taxed at your regular rate.


a payment made by a JOINT-STOCK COMPANY to its SHAREHOLDERS for providing SHARE CAPITAL. Dividends are a distribution of the after-tax PROFITS of the company, and are paid in proportion to the number of shares held. Generally the directors of a company will decide to pay out only a proportion of after-tax profit as dividends, reinvesting the remaining profits in the business (see RETAINED PROFIT).

The DIRECTORS may pay an interim dividend during the accounting period then recommend a final rate of dividend per share for approval by shareholders at the ANNUAL GENERAL MEETING, this final dividend being paid after the AGM. In the UK dividends are paid net of income tax, though shareholders receive a tax credit for the amount of tax deducted by the company from their dividends, which must be added to the net dividends received to establish the shareholder's gross taxable dividend income (see CORPORATION TAX).


a payment made by a JOINT-STOCK COMPANY to its SHAREHOLDERS for providing SHARE CAPITAL. Dividends are a distribution of the PROFITS of the company


A stockholder's share of the profits of a corporation. An insurance dividend is not a true dividend but a return of premium. Dividends from a savings and loan association or credit union are interest, not dividends.
References in periodicals archive ?
Nevertheless, a skeptic may justifiably argue against this point of view, pointing out that a financially viable issuer will as likely meet its dividend commitments as it would its debt service obligations, thereby blurring any distinction between debt and equity.
1, 1997 (years subsequent to the tax years at issue in Ceridian), the FTB had taken the position that as a result of Ceridian, CRTC [section]24410 was wholly inoperable, so that no DRD was permitted for dividends received from an insurance company; see Departmental Policy on Section 24410 Insurance Dividend Deductions, FTB Multistate Audit Program Mem.
24410 provided for a dividend-received deduction for dividends paid by an 80 percent or more owned insurance corporation to the extent that the insurance corporation was subject to the California gross premiums tax.
But look more closely, and you'll see another reason for the dividend.
Of the companies in the Spare, Kaplan study with buyback programs in place from 1996 through 1998, 72 percent raised the dividend as well.
There's one way a company can put a little money in your hands and make its stock more like your trusty bank account: offer a dividend.
You indicated that the IRS is considering the elimination of the dividend offset provision in that procedure and invited comments.
When a corporation receives a dividend from another corporation, the recipient is entitled to a deduction (known as the dividends-received deduction or DRD) equal to 70% of the amount of the dividend.
Tens of thousands of California employers will receive their dividend checks over the next several months under the largest dividend payout in the industry this year.
The company's dividend policy and future dividend payment considerations.
The dividend eligible for the deduction is limited to the greatest of: (1) $500 million; (2) the earnings shown as permanently invested outside the U.
The New Mexico Supreme Court has dealt a serious, and perhaps fatal, blow to New Mexico's attempt to save the constitutionality of the manner in which it taxes a corporation's dividend income.