related topics
{company, market, business}
{rate, high, increase}
{group, member, jewish}
{language, word, form}
{specie, animal, plant}

Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.[1] When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend.

For a joint stock company, a dividend is allocated as a fixed amount per share. Therefore, a shareholder receives a dividend in proportion to their shareholding. For the joint stock company, paying dividends is not an expense; rather, it is the division of after tax profits among shareholders. Retained earnings (profits that have not been distributed as dividends) are shown in the shareholder equity section in the company┬┤s balance sheet - the same as its issued share capital. Public companies usually pay dividends on a fixed schedule, but may declare a dividend at any time, sometimes called a special dividend to distinguish it from a regular one.

Cooperatives, on the other hand, allocate dividends according to members' activity, so their dividends are often considered to be a pre-tax expense.

Dividends are usually settled on a cash basis, store credits (common among retail consumers' cooperatives) and shares in the company (either newly created shares or existing shares bought in the market.) Further, many public companies offer dividend reinvestment plans, which automatically use the cash dividend to purchase additional shares for the shareholder.

The word "dividend" comes from the Latin word "dividendum" meaning " the thing which is to be divided among all".[2]


Joint stock company dividends

Full article ▸

related documents
Economy of New Zealand
Transport economics
Balance sheet
Economy of Chile
International Financial Reporting Standards
Economy of South Korea
Index fund
Economy of Lebanon
Stock market crash
Economy of Spain
Economy of Poland
Economy of Iraq
Economy of Slovakia
Long-Term Capital Management
Economy of Bosnia and Herzegovina
Economy of Norway
Market liquidity
Economy of the Republic of the Congo
Economy of Tajikistan
Federal Housing Administration
The South Sea Company
Economy of Kuwait
Economy of Turkmenistan
Economy of Guyana
General Electric
Economy of Rwanda
Financial capital
Business plan