ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -What is a Dividend? A dividend is a share of profits and retained earnings that a company pays out to its shareholders and owners. When a company generates a profit and accumulates retained earnings, those earnings can be either reinvested in the business or paid out to shareholders as a dividend.

Detailed explanation-2: -A dividend is the distribution of a company’s earnings to its shareholders and is determined by the company’s board of directors. Dividends are often distributed quarterly and may be paid out as cash or in the form of reinvestment in additional stock.

Detailed explanation-3: -Also known as a scrip dividend, a stock dividend may be paid out when a company wants to reward its investors but either doesn’t have the spare cash or prefers to preserve it for other uses. The stock dividend has the advantage of rewarding shareholders without reducing the company’s cash balance.

Detailed explanation-4: -Dividends: A distribution of a portion of a company’s earnings, decided by the board of directors, paid to a class of its shareholders.

Detailed explanation-5: -A capital dividend, also called a return of capital, is a payment that a company makes to its investors that is drawn from its paid-in-capital or shareholders’ equity.