PAYING DIVIDENDS Meaning and
Definition
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Paying dividends refers to the distribution of a share in a company's profits to its shareholders. It is a way for a company to reward its investors by sharing a portion of its earnings with them. Dividends are usually distributed in cash but can also be issued as additional shares or other forms of assets.
When a company earns profits, it may choose to retain the earnings for reinvestment or to pay off debts. However, if a company has surplus profits and wants to distribute them among its shareholders, it can declare and pay dividends. The declaration of dividends is typically done by the company's board of directors.
Dividends are usually paid on a regular basis, such as quarterly or annually, and are expressed as an amount per share. The amount of dividend paid to each shareholder is dependent on the number of shares they hold in the company. For example, if a company declares a dividend of $1 per share and an investor owns 100 shares, they would receive $100 as dividends.
Paying dividends is often seen as a way for companies to attract and retain investors, as it provides them with a tangible return on their investment. It is also a reflection of a company's financial health and profitability. Overall, paying dividends is a crucial aspect of corporate finance and shareholder management, as it creates value for the shareholders and influences their decision to invest or continue investing in a company.
Common Misspellings for PAYING DIVIDENDS
Etymology of PAYING DIVIDENDS
The etymology of the phrase "paying dividends" comes from the combination of the words "pay" and "dividends".
1. Pay: The word "pay" has its roots in the Old French word "paier" which means "to pay" or "to satisfy a debt". It also has connections to the Latin word "pacare" meaning "to pacify" or "to appease".
2. Dividends: The term "dividends" originates from the Latin word "dividendum" which is the gerund form of the verb "dividere", meaning "to divide" or "to distribute". In finance, dividends refer to the portion of a company's profits that are distributed to its shareholders.
When combined, the phrase "paying dividends" signifies the distribution of profits or benefits to individuals or organizations who have invested or contributed in some way.
