Dividend

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Dividend

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%.

Dividend

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.

dividend

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.

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.

dividend

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).

dividend

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

Dividend

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 ?
Allowances Target (%) $'97 Billion 1998 EIA Domestic w/o sinks 100 -443 Domestic+sinks 100 -365 Annex I trading+sinks 100 -210 Global trading+sinks 100 -107 Domestic+sinks+weak 100 -143 double dividend Annex I trading+sinks+ 100 -127 weak double divident Global trading+sinks+ 100 -86 weak double dividend 1999 EMF 16 No trading (mean) 100 -133 Annex I trading (mean) 100 -63 Global trading (mean) 100 -25 1998 White House/CEA "Domestic only" policy case 100 -66 Annex I trading 100 -39 Best case trading 100 -8 1997 IWG Non-price policies, moderate 22 17 (mean) Non-price policies, strong 45 30 (mean) Same plus $50/tC tax 68 2000 CEF study (IWG) Moderate scenario, no 19 40 C charge Advanced scenario, no 29 54 C charge Advanced scenario including 58 10 $50/tC charge GDP Impact in 2010 Incl.
The gain is treated as ordinary income, which is then treated as if the amount of the gain were an excess divident.
Contrary to the interests of the principals (shareholders), management (agents) often have a tendency to keep divident payments low and to increase free cash flow beyond the optimum point, using the retained resources to expand and to diversify.
The amount treated as a divident is not deductible by the issuer, but for purposes of the dividends-received deduction will be treated as dividend to a corporate holder.