What is the dividend ?

  • Dividend Yield:

    The dividend yield is a measure of the annual dividend income an investor can expect relative to the current market price of the stock. It is calculated by dividing the annual dividend per share by the stock’s current market price.

  • Payment Frequency:

    Dividends can be paid on various schedules, such as quarterly, semi-annually, or annually. Some companies pay special dividends outside of their regular schedule.

  • Dividend Reinvestment Plans (DRIPs):

    Some companies offer DRIPs, allowing shareholders to reinvest their dividends to purchase additional shares of the company’s stock.

  • Taxation:

    Dividends are usually taxable income for the shareholders. The tax treatment of dividends can vary based on the investor’s jurisdiction and the type of dividend.

  • Dividend Policy:

    A company’s dividend policy outlines how it intends to distribute profits to shareholders. Some companies prioritize regular dividend payments, while others may reinvest profits for growth.