What does dividend mean?

Dividends are dividends paid to investors by joint-stock companies every year according to a certain proportion of their share in profits. It is the return on investment of listed companies to shareholders. Dividend is a way to allocate the current year's income to shareholders after extracting statutory provident fund, public welfare fund and other items according to regulations. Usually, after receiving dividends, shareholders will continue to invest in the enterprise to realize compound interest.

Ordinary shares can enjoy dividends, while preferred shares generally do not enjoy dividends. A joint-stock company can only distribute dividends when it is profitable.

Dividend, also known as profit sharing, is short for dividend distribution. 1899 pointed out in the "International Bonus Conference" held in Paris: "Bonus refers to a certain proportion of profits promoted by an enterprise unit and the remuneration distributed to its employees. This reward is predetermined according to the plan of the free agreement; Once the proportion is determined, the employer may not change it. " Professor Rob Sannad of the University of Chicago in the United States defines dividends as: "The so-called dividends, in a nutshell, refer to the profits that employees distribute to employers outside their normal wages."

The explanation of dividend in Ci Hai is: "At the end of each final account, an enterprise group proposes to distribute part of its surplus to users or workers, which is called dividend, also known as bonus, which means to reward labor subsidies and wages". Mr. Lu Guang also has a similar definition: "In order to improve production and reduce costs through human cooperation, employers share the profits of public institutions with employees in a predetermined proportion according to free contracts." In addition, Mr. Li defines it as: "The company's business operations make profits in prosperous years, and puts forward a part of net income to distribute to employees, which is called dividends." Mr. Du Gongbi also pointed out: "At the end of each business year, after the final accounts, if the company has a surplus, the usual practice is to pay the profit-making enterprise income tax first, withdraw the statutory surplus reserve, and withdraw the fixed-rate dividend, and the rest are dividends and bonuses, which are the remuneration contributed by shareholders. If you give up a group of Jiahui employees, it will be dividends. "

According to the Company Law of Taiwan Province Province, when the company has no surplus, dividends and bonuses shall not be distributed. However, if the statutory surplus reserve exceeds 50% of the total capital, or the surplus reserve extracted in the surplus year exceeds 20% of the surplus, the company can pay dividends and bonuses in excess to maintain the stock price. This shows the limit of dividend distribution.

Introduction: Dividends are divided into two ways: dividend reinvestment and cash dividend. The difference between these two methods is that one is simple interest appreciation, while dividend reinvestment is compound interest appreciation. Therefore, most customers prefer to choose the way of dividend reinvestment.

Fund dividend

brief introduction

Refers to the fund's net investment income and its distribution to fund holders. The net income of the fund refers to the balance of the fund income after deducting the expenses that can be deducted from the fund income according to the relevant regulations, including dividends, bonuses, bond interest, price difference between buying and selling securities, bank deposit interest and other income.

Fund dividend means that the fund distributes part of the income to fund investors in cash, which was originally a part of the net value of the fund unit. Therefore, investors actually get the assets on their books, which is why the net value of fund units falls on the day of dividends (ex-dividend date).

Fund dividends and income: The more dividends, the better. Investors should choose a dividend distribution method that suits their own needs. Fund dividend is not the biggest standard to measure fund performance. The biggest criterion to measure the fund's performance is the growth of the fund's net value, and dividends are just the cash of the fund's net value growth.

For open-end funds, if investors want to realize income, they can also redeem some fund units to achieve the effect of cash dividends; Therefore, whether the fund pays dividends and the number of dividends will not have a significant impact on investors' investment income. For closed-end funds, because the unit price of the fund is often different from the net value of the fund, it is sometimes not feasible to realize the fund income by selling the fund unit. In this case, fund dividends become the only reliable way to realize fund income. Investors should pay more attention to dividends when choosing closed-end funds.

Cash dividend: Cash dividend is a direct cash dividend, which does not need to pay redemption fee and is tax-free, that is, it is safe to leave the bag;

Dividend reinvestment: reinvesting cash dividends in the fund, commonly known as "rolling interest", can not only avoid the subscription fee for reinvestment, but also enjoy the next dividend of the fund share obtained by reinvestment.

situation

According to relevant regulations, fund dividends need to meet the following three conditions:

First of all, the fund can only be distributed after the current year's income makes up for the previous year's loss;

Second, after the distribution of fund income, the unit net value cannot be lower than the face value;

Third, if the fund investment has a net loss in the current period, it cannot be distributed.

way

There are two main ways of fund dividend: one is cash dividend, and the other is dividend reinvestment.

According to the Measures for the Operation and Management of Securities Investment Funds, if the investor does not specify the dividend distribution method, the default income distribution method is cash dividend. Investors can go to the institution where you buy the fund to modify the dividend distribution method before date of record.

For example, if you hold 6,543,800+shares of a fund, each fund share will receive a dividend of 0.05 yuan: if you choose the cash dividend method, then the basic people will receive a cash dividend of 0.5 million yuan; Assuming that dividends are reinvested, the net value of fund shares on the dividend base date is 1.25 yuan, and then the basic people can be divided into 5,000 yuan1.25 yuan/share = 4,000 fund shares, and the fund shares will become104,000.

The default dividend method of open-end funds is cash dividend, but the basic people can change it independently according to the individual's specific situation and the changes in the fund market.

When changing the dividend distribution method, the consignment customer needs to bring his ID card and securities card to the consignment agency that originally purchased the fund for modification; Direct selling customers can modify themselves through the fund company's website or telephone trading system.

meaning

Generally speaking, citizens must bear a handling fee of about 2% every time they buy and redeem. Because the dividends of open-end funds can enable the citizens to cash out some cash without paying any fees, it is of certain significance for the citizens who need cash or want to settle down but don't want to pay a high redemption fee to redeem the funds. However, for the citizens who don't need to cash in the income for the time being and want to continue to fully share the future upside of the fund, dividends are of little significance.

Dividends and bonuses

Although dividends and bonuses are both gains from stock investment, they are obviously different:

(1) In terms of quantity, the dividend ratio is generally fixed, but the dividend amount is related to the company's profitability;

(2) From the time point of view, dividends can be paid at the end of the year or at the beginning of the second year, or in multiple installments, and dividends are generally paid at the beginning of the second year;

(3) On the object, common shareholders can reduce or even not distribute dividends when the company is in poor operating conditions. Preferred shareholders generally have the protection of dividend income, but generally do not participate in the company's dividends, and the dividends of ordinary shares increase or decrease with the increase or decrease of the company's profits.

Shareholder dividend

form

Generally speaking, shareholders can realize the dividend right in three forms:

1. Distribute cash with the profits of listed companies in the current year;

2. Distribute new shares with the profits of the company in the current year;

3. Convert the company's surplus reserve fund into share capital.

situation

From the legal point of view, shareholders' dividend right is a kind of self-interest right, which is based on the inalienable right of investors as individual shareholders. Once infringed by the company, directors of the company or a third party, shareholders can seek self-help in their own names, such as calling a shareholders' meeting or modifying the distribution plan or judicial relief to safeguard their own interests. Theoretically, the shareholder's dividend right is an inherent right of shareholders, which cannot be deprived or restricted by the company's articles of association or company organization, but in fact, because the shareholder's right is embodied as a creditor's right, its realization is conditional:

1. Cash distribution with profits of the current year shall meet the following requirements:

(a) the company's current profit;

(2) Deferred losses have been made up and carried forward.

(3) Withdraw 65,438+00% of the statutory common reserve fund and 5%-65,438+00% of the statutory public welfare fund;

2. In addition to meeting the condition of 1, the distribution of new shares with the profits of the current year shall also:

(1) The company's previous share issue has been fully raised with an interval of one year;

(2) There are no false records in the financial and accounting documents of the company in the last three years;

⑶ The expected profit rate of the company can reach the bank deposit profit in the same period;

3. In addition to meeting the conditions in Item 2 (1-3), the surplus reserve shall be converted into share capital:

(a) the company has achieved profits in the past three years and can pay dividends to shareholders;

(2) The retained amount of statutory common reserve after distribution shall not be less than 50% of the registered capital;

(3) In addition, according to the Company Law and the Guidelines for the Articles of Association of Listed Companies, the dividend distribution of listed companies must be proposed by the board of directors, and the shareholders' meeting shall be convened for deliberation and voting according to legal procedures, and it can only be realized after the cash distribution plan or 2/3 dividend plan of shareholders' representatives12 or more attending the shareholders' meeting is passed.

(Source: Baidu Encyclopedia)