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Dividends

Categories:
Finance
Accounting
| Contributor:
Valentina
Tags:

Definition

When a company has available cash, retained earnings and bonds/loans covenants the company's board of directors can choose to distribute dividends among shareholders. It is a proportional distribution of income to shareholders. The date of declaration would be the date when the dividend payout is declared, the date of record would be the reference day for dividend payout (if you own shares by this day you will receive dividends), and finally the date of payment.

Example

The amount received by a shareholder is determined by the board of directors and it is proportional to the shareholder's investment in the company.

Source and advanced materials

https://mint.intuit.com/blog/investing/what-are-dividends-5225/

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