Dividends
from class: Principles of Finance Definition Dividends are portions of a company's earnings distributed to shareholders, usually in the form of cash or additional shares. They provide an incentive for investors and represent a share of corporate profits.
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Predict what's on your test 5 Must Know Facts For Your Next Test Dividends are usually declared by the company's board of directors. They can be paid quarterly, annually, or at other regular intervals. The payment of dividends affects both the balance sheet and the income statement. Not all companies pay dividends; many reinvest earnings back into the business. Dividend payments reduce retained earnings on the balance sheet. Review Questions How do dividend payments affect a company's retained earnings? Who typically declares and approves dividend payments within a company? Why might some companies choose not to pay dividends? "Dividends" also found in:
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