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Dividends for stocks

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How do dividends work on the stock market?

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  1. company gets profit the share with the stake holders...To do so they give some amount per share which is known as dividend


  2. Dividend are earnings or distributions that companies want to pay to their shareholders.

    If you own a stock, and the company decides to pay their shareholders a dividend, the company announces to the world that on a given date (payable date) we are going to pay $xx amount (dividend) to all our shareholders as of this date nn/nn08 (record date)

    So who ever owns the stock as of the record date will get the dividend

  3. Some companies offer dividends which as quarterly payment per share for stock holders.  It is usually a matter of a few cents per share, but can add up.  There is a program for people wishing to get involved in the stock market without putting out a large amount of money it is called Dividend reinvestment program (DRIP) and it allows you to use the money from dividends to purchase more shares of the stock, without taking the payment.  There are a lot of good books on the topic.  
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