Question

james green just bought a stock which he expects will provide him with a quarterly cash payment, although that payment is not guaranteed. in fact, he expects the amount of the payment to vary over time. what type of payment is he expecting to receive?

Answer 1

James Green is expecting a payment in the form of a dividend.

Define Dividend.

A dividend is the distribution of profits to shareholders by a corporation. When a corporation makes a profit or has a surplus, it has the option of paying a portion of that profit as a dividend to its shareholders. Any money that is left over is taken out and put back into the business.

A corporation distributes a percentage of its profits and retained earnings as a dividend to its shareholders. Retained earnings, which are accumulated when a corporation generates a profit, can either be reinvested in the business or paid out as a dividend to shareholders.

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