Investment Glossary
Dividends -
Earnings that are distributed to shareholders equal to a portion of the
investment.
For example, if you own 1000 shares of stock in a company that issued
1,000,000 shares of stock, you would receive a dividend equal to 1/1000 of the
profits distributed to shareholders.
Dividends received are counted as earned income and is therefore taxable.
However, often you are allowed to reinvest your earned dividends back into
more of the company stock.
