Cash Dividend

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DEFINITION of 'Cash Dividend'

Money paid to stockholders, normally out of the corporation's current earnings or accumulated profits. All dividends must be declared by the board of directors and are taxable as income to the recipients.

BREAKING DOWN 'Cash Dividend'

Long-term investors who want to maximize their gains should consider reinvesting the dividends. Most brokers offer a choice as to whether you wish to reinvest or take cash dividends.

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RELATED FAQS
  1. Do dividends affect working capital?

    Regardless of whether cash dividends are paid or accrued, a company's working capital is reduced. When cash dividends are ... Read Full Answer >>
  2. How do dividends affect the balance sheet?

    Dividends paid in cash affect a company's balance sheet by decreasing the company's cash account on the asset side and decreasing ... Read Full Answer >>
  3. Where exactly do dividends come from?

    Companies pay dividends in cash, which typically come from the companies' cash flows from operations by selling goods and ... Read Full Answer >>
  4. Why would a company choose to pay a stock dividend instead of a cash dividend?

    For stock investors seeking instant gratification as a reward for having placed their funds in profitable companies, it would ... Read Full Answer >>
  5. I would like to invest in a dividend-paying stock. How can I find out which stocks ...

    There are several accessible sources to help investors identify dividend-paying stocks. Here are a few we can recommend:   Generally, ... Read Full Answer >>
  6. Since stockholders are entitled to a company's assets and earnings, can a stockholder ...

    When buying stock in a company, an investor becomes a part owner of that company. In addition to possessing the small degree ... Read Full Answer >>
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