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.

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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. 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 >>
  2. 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 >>
  3. 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 >>
  4. Do penny stocks pay dividends?

    Because of the small market capitalization and revenues typical of most penny stocks, there are very few that offer dividends. ... Read Full Answer >>
  5. How do dividend distributions affect additional paid in capital?

    Whether a dividend distribution has any effect on additional paid-in capital depends solely on what type of dividend is issued: ... Read Full Answer >>
  6. When does the holding period on a stock dividend start?

    The holding period on a stock dividend typically begins the day after it is purchased. Understanding the holding period is ... Read Full Answer >>

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