Question 1

Q1. What is a Dividend in Stock?

Accepted Answer

Ans: A stock dividend is a payment made to the shareholders in the form of shares. The additional shares offered by the company when the company makes profit.

Question 2

Q2. Does every company offer dividends?

Accepted Answer

Ans: Not every company offers a dividend to their shareholders. Companies that are financially stable and have a good performance report in the past few years often give regular dividends to their investors.

Question 3

Q3. Is a stock dividend a risky investment?

Accepted Answer

Ans: In general, a dividend in stock is not a risky investment strategy, as you do not invest anything and get additional stocks in return. You only hold stocks in the company. However, if a company is making frequent losses, it might stop dividends, which might also decrease the stock price value.

Question 4

Q4. Is dividend investment good?

Accepted Answer

Ans: Stock dividends are a better method of earning regular money through dividend sharing. It is not very risky and is a good source of passive income, especially for retirees.

Dividend in Stock

Dividend in Stock: Definition and How Payments Work

Dividend Payout Ratio Definition, Formula, and Calculation