Dividend are part of the profits and retained earnings that a company pays to its shareholders. If a company makes a profit and accumulates retained earnings, those profits is reinvest able in the business or given to its shareholders as dividends. Moreover, dividend yields is the annual dividend per share divided by the stock price.<\/p>\n\n\n\n
The value of the dividend determines per share and is equalize for all shareholders in the same class (ordinary, preferred, etc.).<\/p>\n\n\n\n
Steps on how it works:<\/strong><\/p>\n\n\n\n The company produces profits and retained earnings .Management decides that it should pay shareholders some excess profit (instead of reinvesting). Board approves plans dividend and than announce dividends (value per share, due date, record date, etc.) and distributes to shareholders.<\/p>\n\n\n\n