What is Dividend ?

Dividend is the part of Net Profit After Tax that is distributed to the share holders of the company each year.

According to the law, the company must have to organize AGM regularly at each year.Dividend is proposed by the Board of Directors but it has to be permitted by the Share Holders on AGM to be effective.

Dividend is paid to the share holders in two forms :
1. Cash Dividend
2. Stock Dividend


Explanation: Suppose A & B co. is a public limited company, Board of Directors of whom have Proposed 20 % dividend for the share holders, and the share holders at the AGM has approved 20 % dividend. If so then it is called dividend.