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A portion of a company's current or retained
earnings
paid out to holders of common and preferred shares, the amount
having been decided on by the company's board of directors. A
dividend may be in the form of cash or in additional stock. A
preferred dividend is usually a fixed amount, while a common
dividend fluctuates according to the earnings of the company.
Dividends are usually paid quarterly.
The companies that offer dividends are most often
companies that have progressed beyond the growth phase, and no
longer benefit by reinvesting their profits, so they usually choose
to pay them out to their shareholders.
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