Generally, a dividend is a share of a surplus or something extra. In regards to corporate affairs, a
dividend is a payment made to shareholders out of the corporation's profits based on the number of
shares they own. Payment can be in the form of cash, new shares or even an ownership interest in
other corporate property. Dividends on preferred shares will usually be for a fixed amount each year
and may be cumulative or non-cumulative. Dividends on common shares typically vary depending on
the profits of the company. In bankruptcy, a dividend is a payment pro rata to a creditor of a person
adjudged bankrupt.
