Dividend Income
Dividend income refers to the earnings distributed to Shareholder/">Shareholders from a Corporation’s profits. It is a form of Passive Income, paid out typically on a quarterly basis, and is usually expressed as a fixed amount per Share. Investors who hold Stocks that pay dividends receive this income as a reward for their investment in the company.
For example, if an investor owns 100 Shares of a company that pays a quarterly dividend of $0.50 per Share, they would receive $50 in dividend income each quarter (100 Shares x $0.50). Over a year, this would total $200.
In a different case, an investor holds Shares in two companies: Company A pays a $1.00 dividend per Share, while Company B pays $0.75. If the investor owns 50 Shares of Company A and 100 Shares of Company B, their annual dividend income would be $50 from Company A (50 Shares x $1.00) and $75 from Company B (100 Shares x $0.75), resulting in a total of $125.