Dividend

A dividend is a cash or stock distribution paid by a company to its shareholders, usually out of retained earnings. Cash dividends are by far the most common; stock dividends issue additional shares pro-rata instead of cash.

The payment cycle has four dates: declaration (board announcement), ex-dividend (the first day buyers no longer receive the upcoming payment), record (shareholders on the register get paid), and payment (cash actually transferred).

Mature, cash-generative businesses pay dividends; high-growth firms typically reinvest cash internally instead. A dividend cut almost always triggers a sharp share-price drop and signals fundamental stress.