A dividend is a payment made to shareholders from a company's earnings. It is generally paid out in real money or extra portions of stock and not set in stone by the organization's governing body.
Most dividend-paying businesses do so to encourage investors to invest in their stock and to share their profits with shareholders.
Sure, let's say a business earned Rs. 1 crore and makes the decision to divide Rs. 10 lakh to its shareholders as dividends.
Related Articles
Also, let's say that the company has one lakh outstanding shares.
A shareholder's share of the dividend would be as follows if they owned 1,000 shares of the company's stock:
(1,000 / 1,00,000) * 10,00,000 = Rs. 10,000
In this way, the investor would get a profit of Rs. 10,000 for one thousand shares.
Let's assume that the ex-date is set for June 1, 2023, and the record date is set for June 5, 2023, with regard to the ex-date and record dates.
This implies that financial backers who buy the stock on or after June 1, 2023, won't be qualified for the profit installment.
On June 5, 2023, the company's records will be checked to see which shareholders are eligible for the dividend.
