ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -An income stock is a security that pays regular, often steadily increasing, dividends.

Detailed explanation-2: -Dividend income is a form of passive income that is earned by owning stocks that pay dividends, which are a portion of the company’s profits that are distributed to shareholders.

Detailed explanation-3: -Dividends represent company profits that are paid to shareholders. When a dividend increase is the result of improved cash flows, it is often a positive indicator of company performance. Another reason for a dividend hike is a shift in company strategy away from investing in growth and expansion.

Detailed explanation-4: -The investor who bought 500 shares of stock at $5 per share for $2, 500 benefited when the stock price rose. Regardless of the movement in the price of the stock, the investor benefits if company XYX announces a special dividend of $0.10 per share. In this case, the investor has dividend income of $50 (500 x $0.10).

Detailed explanation-5: -Invest New Cash In Dividend-Paying Stocks To Increase Dividend Income. Receive Dividend Increases To Increase Dividend Income. Reinvest Your Dividends To Increase Dividend Income. Swap Lower-Yielding Stocks For Those With Higher Dividend Yields To Increase Dividend Income. Practice Dollar-Cost Averaging.