What are stock dividends?
In: Economics
for the investor its really just a forced sale of your stock. the dividend you recieve is deducted from the share price so your not actually making any money from dividends.
A stock is partial ownership of a company.
A dividend is your share of the companies profits based on how many parts you own.
So if a company made 1 million $ in a year and you own 1% of it you’ll receive 10.000$ as a dividend that year.
There are stocks that don’t pay dividends though. They are “reinvested on your behalf”
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Stock dividends are a percentage of the company’s profits that are paid to the shareholders. Dividends are usually paid when the company thinks they can’t achieve more returns by just reinvesting in the company. This is why newer companies like Tesla don’t usually pay dividends because they are trying to reinvest in the company’s operations to make it more profitable.
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