eHow launches Android app: Get the best of eHow on the go.

  • Bookmark and Share

Dividends

    Dividends Editor's Picks

    • What Are Dividends in Taxes?

      All tax laws are subject to change. Prior to the administration of George W. Bush, the U.S., like most of the world, treated taxed dividends as normal income. The Jobs and Growth Tax Relief Reconciliation Act of 2003, however, lowered the tax rate on qualified dividends to 15 percent. The law, however, included a sunset clause that is... more »

    • How to Increase Dividends

      A well-balanced portfolio of dividend-paying stocks can provide you with regular income. A dividend is a payment to shareholders of their portion of the profit. Dividends act like interest paid on a savings account except that dividends don't have to be paid regularly. This may be the biggest advantage to owning stock. more »

    • How Life Insurance Dividends Work

      Life insurance dividends are funds earned from life insurance policies. Not all policies, however, earn dividends. Dividends are only earned by permanent, participating policies. A participating policy is simply a policy that earn dividends if performance is better than the average. Premiums on participating policies are higher than... more »

    • How to Change Flow of Dividends

      If you have invested money in an investment that generates dividends, then you can choose where you want the flow of dividends to go. Some people choose to receive dividends through a check that is mailed out to them whenever dividends are distributed. Other people choose to reinvest the dividends into the investment, so they receive... more »

    • How Are Stock Dividends Taxed?

      As with all aspects of the Internal Revenue Code, the laws of taxing dividends are written by Congress and subject to change. Prior to 2003, dividends were taxed as normal income at the taxpayer's regular rate. Because the regular income tax is a progressive tax, it assesses high income individuals at a higher rate (as high as 35... more »

    Dividends Quick Guides

    • About Dividends

      Cha-ching! Not only can you make a profit from buying and selling stocks, but some...

    • How to Buy Stocks

      Learning how to buy stocks can help beginning investors earn higher returns from their stock...

    • Penny Stocks 101

      When it comes to investing, not all of us have thousands of dollars to pour into the stock...

    • Investing Tips

      Investing your money is a great way to ensure a secure retirement, but it can be risky. Know...

    Dividends Articles

    • What Are Dividends?

      For some stocks, the dividend is the major source of profit for an investor. The dividend yield for common stocks is a basic way to show the... more »

    • How Are Dividends Paid Out?

      There are two ways that shares of stock in a company can make money for investors. If the price of the stock goes up, shareholders make a profit.... more »

    • How Are Dividends Taxed?

      Any time an investor is paid more than $10 of dividends in a single year, that company is responsible for providing a 1099-DIV form to the... more »

    • What Are Dividends Declared?

      Prior to the payout of a dividend, a company will announce or "declare" the payment of the dividend. This will include the amount of the dividend,... more »

    • How Often Are Dividends Paid?

      Historically up to 40 percent of the stock market's total return over time is its cash dividends. The best source for distribution dates is the... more »

    • When Are Dividends Paid?

      Dividends are payments from corporations to investors that can are either cash, property or stock. They can play an important role in an... more »

    Wikipedia

    Dividend

    Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend.

    For a joint stock company, a dividend is allocated as a fixed amount per share. Therefore, a shareholder receives a dividend in proportion to their shareholding. For the joint stock company, paying dividends is not an expense; rather, it is the division of an asset among shareholders. Public companies usually pay dividends on a fixed schedule, but may declare a dividend at any time, sometimes called a special dividend to distinguish it from a regular one.

    Cooperatives, on the other hand, allocate dividends according to members activity, so their dividends are often considered to be a pre-tax expense.

    Dividends are usually settled on a cash basis, store credits (common among retail consumers cooperatives) and shares in the company (either newly-created shares or existing shares bought in the market.) Further, many public companies offer dividend reinvestment plans, which automatically use the cash dividend to purchase additional shares for the shareholder.

    History
    The word "dividend" comes from the Latin word "dividendum" meaning "the thing which is to be divided among all".

    Joint stock company dividends
    A dividend is allocated as a fixed amount per share. Therefore, a shareholder receives a dividend in proportion to their shareholding.

    Forms of payment
    Cash dividends (most common) are those paid out in the form of a check. Such dividends are a form of investment income and are usually taxable to the recipient in the year they are paid. This is the most common method of sharing cor read more at » http://en.wikipedia.org/wiki/Dividend

    Related Ads

    Dividends People & Community

    Connect with people who share your interest by joining one of our Groups:

    Topic Contributors
    Get Free Personal Finance Newsletters

    Copyright © 1999-2009 eHow, Inc. Use of this web site constitutes acceptance of the eHow Terms of Use and Privacy Policy.   en-US Portions of this page are modifications based on work created and shared by Google and used according to terms described in the Creative Commons 3.0 Attribution License.

    Demand Media