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You have recently invested in a corporation on Wall Street and you have also heard the
term dividend and it says explain to you rather loosely that it is another way of making money
in investing off of a corporation. Hello I'm Robert Todd and I'm here to answer the question
how does the corporation issue dividends? Well first of all I think it is important
to know that a dividend is a percentage of the corporation's profits that the corporation
decides to give back to the shareholders and this is normally done on the basis of how
many shares a shareholder owns and also on the length of time that that shareholder has
owned that particular share and basically a dividend is sometimes used as a barometer
of how well that corporation is doing. In other words how much in the way of disposable
earnings does the corporation have to give back to its shareholders. Now one of the controversies
over dividends is that many shareholders think that there is double taxation, the corporation
has already paid a tax on its earnings and then when the individual shareholder receives
the dividend, the dividend is taxed to that individual shareholder and that individual's
personal tax rate. I'm Robert Todd and thank you for watching.