a part of the profit which is distributedto shareholders in a company
Question
a part of the profit which is distributedto shareholders in a company
Solution
This is known as a dividend. A dividend is a payment made by a corporation to its shareholders, usually in the form of cash or additional shares. The company's board of directors determine the amount of the dividend, which is then approved by the shareholders. Here are the steps:
- The company earns a profit during a specific period.
- The board of directors reviews the company's financials.
- The board decides to distribute a portion of the profits back to the shareholders.
- The board declares a dividend, specifying the amount per share.
- Shareholders receive the dividend in proportion to the number of shares they own.
- The dividend can be paid out in cash or additional shares of the company.
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