Dividend Definition

A dividend is a taxable payment given to shareholders of a company. Dividends usually are issued quarterly and take the form of cash or additional shares of stock. Dividends provide investors a key incentive to purchase stock in stable companies with stock that is not expected to increase in value to any great extent. Dividends are paid out on a "per share" basis, such that an individual owning two hundred shares would receive twice the dividends paid to another individual owning only one hundred shares.