What is a cash dividend?

A cash dividend is a sum of money that a business distributes regularly to its shareholders.

Cash dividends give investors income, but they also have tax ramifications and could lower the share price of the corporation by the payout amount. A company’s distribution of profits to shareholders is known as a dividend. When a firm has extra capital that is not used to fund the business, it often distributes dividends in the form of cash. A company can also issue a stock dividend or a property dividend.

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