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Dividend

Dividend

A dividend is the distribution of a company's earnings to its shareholders and is determined by the company's board of directors. Dividends are often distributed quarterly and may be paid out as cash or in the form of reinvestment in additional stock.

The dividend yield is the dividend per share and is expressed as dividend/price as a percentage of a company's share price, such as 2.5%.1

Common shareholders of dividend-paying companies are eligible to receive a distribution as long as they own the stock before the ex-dividend date.

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