Dividends

From Financial Literacy Wiki

Dividends are cash payments that represent a portion of profits collected for a period of time. They are can be paid quarterly (Typical for REITS or big companies that have predictable cashflows) or yearly. How much of the profit to be paid to shareholders is totally up to the discretion of the management of the companies. They are not obligated to. Often however, they will return a portion to reward their investors. This is because a dividend paying stocks especially those that pay high dividend often, can fetch a higher price. Such high price allows the company to raise more capital when they issue/place more stocks.