Dividend
A ‘dividend’ is a periodic distribution of a portion of a company’s profits to its shareholders or investors. Dividends are a form of remuneration for shareholders who have invested in the company by purchasing shares. These payments are usually made in cash, but may also be in the form of additional shares or other forms of value. Dividends are distributed to shareholders in proportion to the number of shares held and are linked to the company’s financial performance. Companies tend to distribute them when they generate sufficient profits to do so in a sustainable manner. Moreover, not all companies choose to distribute dividends. Some companies may prefer to reinvest profits to finance corporate growth and development.