Definition:
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.
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Example:
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.
Book Excerpt:
(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.
