Dividend

A dividend is a portion of a company’s profits distributed to its shareholders, typically in cash or additional shares. It represents a return on investment for equity holders and is a sign of a company’s financial health and profitability.

Dividends are usually declared by the board of directors and can be issued:

• Regularly (quarterly, semi-annually, or annually)

• As special dividends (one-time distributions due to exceptional profits)

• In the form of stock instead of cash

Dividend-paying companies are often mature, stable firms with consistent earnings. Startups and high-growth ventures, on the other hand, typically reinvest profits into operations and expansion instead of distributing dividends.