ENTREPRENEURSHIP

Detailed explanation-1: -Dividend is usually a part of the profit that the company shares with its shareholders. Description: After paying its creditors, a company can use part or whole of the residual profits to reward its shareholders as dividends.

Detailed explanation-2: -Dividends are paid out of the company’s earnings after tax (EAT). Dividends also help determine the value of a company’s shares. They signal to shareholders that the business is earning enough to support growth and share a portion of the gains with its owners.

Detailed explanation-3: -Stock: A type of security that signifies ownership in a corporation and represents a claim to a part of the company’s profits or losses. Companies usually issue stock to raise money for a variety of reasons, including expanding or modernizing their operations.

Detailed explanation-4: -Earnings per share or EPS is calculated as a company’s earnings – which do not account for the distribution of dividends-divided by the outstanding shares. Investors track this metric to get a sense of the progress of a company and determine the valuation.