Question

Johnny has invested in 10 shares of a big name electronics company. Each share is worth $150.28, and the company pays Johnny $2.13 for each share that he owns. With his 10 shares he earns $21.30 per year. What is this type of earning called?

Answer 1

........ask johnny......

Answer 2

This type of earning is known as dividends.

Dividends are payments made from profits of a company to its shareholders. Often, dividend amounts are decided by the board of directors of a company and ratified by the shareholders.

It is paid out per share and the more shares one has the more their dividend payment.

Dividends can either be paid out in cash or in the form of shares.