Dividends are funds distributed to shareholders taken from a company’s equity. In public companies, dividends are typically distributed at the end of a quarter or year.
When you hear companies paying $2.00 per share or $1.75 per share how much did they actually pay out? If you have 74,000,000 shares outstanding, multiply the dividend by the number of shares outstanding to find out.
(Excerpts from Financial Intelligence, Chapter 12 – On the Other Side)
Preferred shares – also known as preference stock or shares – are a specific type of stock. People who hold preferred shares usually receive dividends on their investment before the holders of common stock get a nickel. But preferred shares typically carry a fixed dividend, so their price doesn’t fluctuate as much as the price of common shares.