Dividend - Glossary Term

A Dividend is a payment received by a shareholder, rewarding their investment in a company’s shares. The level of the dividend that is paid to shareholders is based on annual company profits. This figure is decided by the directors of a company and confirmed at the annual general meeting. In a loss making year a company can elect not to make a dividend payment, or use up reserves to pay dividends. This decision is invariably dictated by the need to keep shareholders committed to their capital investment.

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