A portion of a company’s profit paid to common and preferred shareholders
Payout Ratio:
The percentage of corporate earnings paid out as dividends to shareholders
Dividend Policy:
Standards of a corporation that determine what amount and when a dividend is paid
Dividend Rate:
The fixed or floating rate paid on preferred stock based on par value or the established amount regularly paid out on common stock
Dividend Re-Investment Plan (DRIP):
The automatic re-investment of dividends from a company into more shares of a company’s stock held by a shareholder (often without commissions). This approach allows an investor to use dollar cost averaging (DCA) to accumulate more shares without charges to the shareholder.
Dividend Yield:
Dividend rate divided by the current price per share (common or preferred) of the company.
