Glossary definition

What is a dividend?

< 1 min read

Dividends are a way to distribute a percentage of a company’s earnings to its shareholders. They typically take the form of cash but can also be stock or property.

They are paid out of a company’s available profit after tax.

This can be taken from retained profits from previous years, as well as profits from the current period. Dividends can be used to encourage investors in the business.

Subscribe to the Sage Advice newsletter

Join more than 500,000 UK readers and get the best business admin strategies and tactics, as well as actionable advice to help your company thrive, in your inbox every month.

Subscribe now