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    Definition of dividend

    Dictionary of Accounting Terms: dividend
    dividend

    distribution of earnings paid to stockholders based on the number of shares owned. The most typical type of dividend is a cash dividend. Dividends may be issued in other forms such as stock and property. Dividend reinvestment plans also exist where stockholders can reinvest the proceeds of the dividend to buy more shares of stock.

    Dictionary of Banking Terms: dividend
    dividend

    1. quarterly payment to stockholders of record, as a return on investment. Dividends may be in cash, stock, or property, and are declared from operating surplus. If there is no surplus, the payment is considered a return on capital. Dividend payments are, in effect, taxed twice-once when corporate profits are taxed and again when the dividend is received by a taxpaying stockholder.
    2. money paid to the holder of a share account in a credit union; the payment is the equivalent of interest.

    Dictionary of Business Terms: dividend
    dividend

    payment by a corporation to shareholders, generally taxable as ordinary income, for which most corporations receive no deduction.

    Dictionary of Finance and Investment Terms: dividend
    dividend

    distribution of earnings to shareholders, prorated by class of security and paid in the form of money, stock, scrip, or, rarely, company products or property. The amount is decided by the board of directors and is usually paid quarterly. Dividends must be declared as income in the year they are received. According to the jobs and growth tax relief reconciliation act of 2003, dividends are taxed at either the 5% or 15% tax rate, depending on the taxpayer's tax bracket.

    Mutual fund dividends are paid out of income, usually on a quarterly basis from the fund's investments. The tax on such dividends depends on whether the distributions resulted from capital gains, interest income, or dividends received by the fund.

    Dictionary of Insurance Terms: dividend
    dividend

    sum returned to a policyowner by an insurance company under a participating policy. Dividends are not deemed as taxable distributions, as the Internal Revenue Service interprets them as a refund of a portion of the premium paid. There are several ways in which the policyowner may use dividends.

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