Investing term

What is Dividend?

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

A dividend is a slice of a company's profit paid out to shareholders, usually in cash and usually every quarter. If you own 100 shares and the company pays a $0.50 dividend, $50 lands in your account — money you can spend or reinvest to buy more shares.

Not every company pays one. Mature, steady businesses tend to pay regular dividends, while fast-growing companies often pay nothing and plow profits back into growth instead. A dividend is never guaranteed — a company's board decides each one, and they can cut or cancel it in a tough year.

For example

A stock trading at $40 that pays $1.60 in dividends per year has a "dividend yield" of 4% ($1.60 ÷ $40) — your cash return before the share price even moves.

Dividend is taught hands-on in Stage 4 — Stocks, Bonds, Cash & Alternatives.

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Related terms

AlternativesInvestments outside the core stocks/bonds/cash mix — REITs, commodities, gold, crypto.BondA loan from you to an issuer (government or company), repaid with interest on a known schedule.Capital gainThe profit from selling an investment for more than you paid.CommodityA raw physical good like gold, oil, wheat, or copper — priced by the ounce, barrel, or bushel.
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