Dividends
Dividends
When the company makes money, so do you-if you are a shareholder. The portion of a
corporation's after-tax earnings that is distributed to stockholders is called a
dividend.
Companies can certainly lose money too, in which case there would be no dividends. You
would not, however, have to pay out any money, although the value of the stock would drop
as any company that is losing money is obviously less valuable.
TIP
When the company makes a profit, the whole profit, or some of it, is divided up
among everyone who has a share. These payments are called dividends (divide
up-dividends, get it?). Try to buy stock in a company that will continue to make a
profit.
Assets
Anything you own that's valuable is an asset.
