PAYS DIVIDEND Meaning and
Definition
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The term "pays dividend" is a financial expression that refers to the practice of distributing a portion of a company's profits to its shareholders. A dividend is a form of payment made by a corporation to its shareholders, usually in the form of cash or additional stock. This distribution is made by the company's board of directors as a way of sharing the profits or earnings generated by the business with its investors or owners. When a company pays dividends, it provides a tangible return on investment for shareholders who have invested in the company's stock.
Paying dividends is typically a sign of financial stability and success for a company. It indicates that the company is generating sufficient profits to reward its shareholders. Dividends can be a significant source of income for investors, particularly those seeking regular cash flow from their investments. They function as a way for shareholders to realize a return on their investment, separate from any potential gains from selling the stock.
The decision to pay dividends and the amount to be paid is made at the discretion of the company's management, considering various factors such as earnings, cash flow position, capital requirements, and overall financial health. Companies may choose to pay dividends regularly, such as on a quarterly or annual basis, or they may declare one-time special dividends based on specific circumstances. Overall, "pays dividend" pertains to the act of distributing profits to shareholders and represents a crucial aspect of shareholder value creation in businesses.
Common Misspellings for PAYS DIVIDEND
Etymology of PAYS DIVIDEND
The etymology of the phrase "pays dividend" can be understood by analyzing the origins of its constituent words.
1. "Pay": The word "pay" comes from the Old French term "paiier" which means "to pay" or "to satisfy a debt". This Old French term was derived from the Latin word "pacare" meaning "to pacify" or "to make peaceful". Over time, "paiier" evolved into the Middle English word "payen" and eventually became the modern English "pay".
2. "Dividend": The word "dividend" can be traced back to the Latin term "dividendum" meaning "thing to be divided". In Latin, the verb "dividere" translates to "to divide" or "to separate". From "dividendum", the word went through Old French and Middle English before reaching its current form as "dividend".
