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What Is Dividend?

Definition and plain-English explanation of "Dividend"

Dividend — Basics illustration

A dividend is a cash payment made by a company to its shareholders, usually quarterly. Dividends are paid from a company's profits as a way of returning value to investors. Not all companies pay dividends — fast-growing companies typically reinvest profits rather than paying them out. The dividend yield is the annual dividend divided by the stock price, expressed as a percentage.

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