Dividends are a distribution of a portion of a company's earnings to a certain class of its shareholders. The amount is decided upon by the board of directors and is most often quoted in terms of the dollar amount each share receives. It can also be quoted in terms of a percent of the current market price, referred to as dividend yield.
Dividends may be in the form of cash, stock or property. Most secure and stable companies offer them to their stockholders. High-growth companies rarely offer dividends because all of their profits are reinvested to help sustain higher-than-average growth.
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