INV - Stock Dividends Lesson

Stock Dividends

Introduction

Even though stocks come with the most risk, there are a lot of potential rewards. Not only can you profit from an increase in the price of your shares, but if the company makes a profit they sometimes share that profit with their shareholders! These types of stocks are called income stocks. The profit that is split is called a dividend. Dividends are usually only around 2% of the price of each share. It’s definitely a nice perk of owning shares, but won’t make you a millionaire overnight!

Dividend Income Checks

Dividend income checks are usually paid out annually or quarterly. A dividend is awarded for each individual share.

In Your Notebook: Please take down important notes, such as formulas, and attempt the practice examples on your own before viewing the solutions!

 

Stock Yield and Return on Investment

Two other concepts that deal with dividends are the stock yield and the return on investment. Click the tabs below to find out more about each of these.

Use the arrow on the bottom right to advance to the Return on Investment section after you do the stock yield example.

Why do companies “go public?

Watch this video to see why companies let the public buy shares in their company!

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