Dividends distribute company profits to shareholders

Dividends are payments made by companies to shareholders from profits, either in cash or shares. They are declared by the board of directors and are a way for investors to receive a share of a company's earnings. Companies decide whether to distribute profits as dividends or reinvest them. The process involves reporting profits, planning distributions, obtaining shareholder approval, and then distributing the dividends on set dates. Dividends can be interim, final, or special, depending on timing. The dividend payout ratio, calculated by dividing dividends paid by net profits, determines how much is distributed. Payments can occur monthly, quarterly, semi-annually, or annually.