When firm with stakeholders earns profit, they often share this with their investors. This particular share of earnings paid to shareholders is called dividend.

Live TV

Loading...

While it’s up to the company management to decide how much payment should be paid, they are usually paid on monthly or quarterly basis.

They can be paid in different forms based on the decision of the management. It could be in form of cash payment or additional shares.

In some occasion, this could be in form of other means such as property, gifts etc.

The payment of dividend is key for individual investors as they not only provides income for the investor, but also shows that the firm in which they had invested is going in a positive direction.

However, there exists opposite views as well about them. This dividends could prompt investors to give higher value to the current fund over investment into other funds as well.

They may end up in the hope that the present dividend could be permanent.

Similarly, any firm that has a tradition of paying dividend consistently could face a fall in confidence if it stops the pattern for one reason or other.