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A dividend is a portion of a company's earnings that the board of driectors has decided to pay shareholders. Dividends can be in stock or in cash.
Common stockholders receive ayments based on earnings and are usually paid quarterly or annual. Preferred stockholders normally receive a fixed cash dividend, similar to bondholders getting interest payments.
Emerging or growth companies normally do not pay high or sometimes any dividends.
Copyright  2006 American Investment Training, Inc.
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