How Business share profits with shareholders #Dividends #investsmart

A dividend is when a business shares some of its profit with its shareholders.

When a company makes a profit, it has two main options. It can reinvest that profit back into the business to grow, or it can pay some of that profit out to the people who own shares in the company.

If it’s a privately owned business, those dividends usually go to the directors or owners. But if it’s a publicly listed company and you own shares, you’re entitled to receive a dividend too.

The amount you receive depends on how much of the company you own. For example, you might own a very small percentage and receive a $20 dividend, while major shareholders or founders who own a large portion of the company may receive millions.

It’s also important to note that companies don’t have to pay dividends. They can choose to keep their profits and reinvest them into the business instead.

General advice only.

Amy Lehmann is an Authorised Representative (No. 1292710) of Consortium Private Wealth Pty Ltd (AFS Licence 495401).
#Dividends #InvestSmart #PassiveIncome #WealthBuilding #MoneyTok #financialfreedom