dividend

A dividend is a payment a company can make to shareholders if it has made a profit. It is essentially the distribution of a company’s earnings to its shareholders. The amount a company pays as dividends to its shareholders is determined by its board of directors. Dividends are often distributed periodically – monthly, quarterly, or annually – and may be paid out as cash or in the form of reinvestment in additional stock. Though dividends may be paid out by companies, other investment vehicles like mutual funds and exchange-traded funds (ETFs) also pay dividends.