Dividend
A dividend is a cash payment a company makes to its shareholders out of its profits, usually every quarter.
Dividend yield is the yearly dividend divided by the share price. Many growth companies pay none and reinvest their profits instead.
Formula
Dividend yield = annual dividend per share ÷ share price
Related terms
- Stock: A stock is a unit of ownership in a company.
- Capital gain: A capital gain is the profit from selling an investment for more than you paid for it; selling for less is a capital loss.
- Compound interest: Compound interest is interest earned on both your original money and the interest it has already earned, so savings grow faster over time.
Practise with $10,000 in play money
Free. No real money involved.
For learning only. This isn't financial advice.