Dividends: What Types Are There And How Do They Work



So, there’s an old saying, “It pays dividends.” It just means that something you do now can pay off in the future. In the world of stocks, sometimes it actually does—in the form of, well, a dividend. So, what are those? Dividends are regular payments of a company’s profits to shareholders. They’re sort of like rewards for putting your money into their venture.

Most often, companies pay out dividends in cash, but they can also give additional stock to their shareholders as the reward.

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