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dividend

definition

A periodic distribution of a portion of a company's earnings to its shareholders. Firms that pay dividends are typically mature companies that are no longer growing at a rate that provides incentives to investors in the form of significant increases in the price of their stock. Instead, they try to make the stock more attractive to investors through the payment of dividends. See Growth Stock, Income stock, Record Date; Ex-Dividend.

Related Terms

 • ex all  • ex-dividend shares  • undistributed profit  • freeze  • income stock  • owner of record  • raise  • payout ratio
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