Dividend: A dividend is a payment made by a corporation to its shareholders, typically derived from the company’s profits. Dividends are often distributed as cash payments, shares of stock, or other property and represent a portion of the company’s earnings allocated to shareholders as a reward for their investment.
Ways to Use the Term “Dividend”
- Financial Reporting:
- “The board approved a quarterly dividend of $1.50 per share, reflecting the company’s strong financial performance.”
- “Dividends are recorded under the equity section of the company’s balance sheet.”
- Investor Communication:
- “Investors prefer companies with consistent dividend payouts, as they signify financial stability and profitability.”
- “Our company has maintained a dividend yield of 4% over the last fiscal year.”
- Tax and Accounting:
- “Dividends received by shareholders may be subject to income tax, depending on their residency and tax regulations.”
- “Declared dividends must be recorded in the financial accounts as a liability until paid.”
- Corporate Strategy:
- “The company retained most of its earnings for expansion and declared only a minimal dividend this quarter.”
- “Companies in mature industries often pay higher dividends as growth opportunities are limited.”
- Legal and Compliance Context:
- “A corporation must comply with state and federal laws to ensure dividends are distributed from lawful earnings.”
- “Shareholders must be informed of the dividend payout date and record date.”
