How Dividends Work for Beginners (With Simple Examples)

What is a dividend?

A dividend is a cash payment some companies/funds may pay to shareholders.

Dividend yield (simple)

Yield is a ratio (dividend amount compared to price). It can change as prices and payouts change.

Reinvesting dividends (DRIP concept)

Reinvesting means using dividends to buy more shares. Over long periods, reinvestment can compound.

See examples: Compound interest examples

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