Business dividends are the profits that the company distributes to its associates, they are delivered periodically. The distribution of business dividends must be approved by the General Shareholders' Meeting, after reviewing the financial statements of a previous period that yields profits.
When the company shows losses of capital stock, it is
essential to reintegrate the capital.
Regarding the award of business dividends, it is important
to emphasize that these cannot be higher than the profits obtained or the
reserves that the company has.
Business dividends are a very attractive element for people
to buy company shares.
We will define some basic terms
A company is made up of qualified human resources:
entrepreneurs and employees who are dedicated to creating goods or services in
exchange for a cash benefit. Goods are the products that companies manufacture
and services are all the activities that companies provide us.
Learn more about business dividends
When we invest in the shares of a company, we are buying
small fractions of the company, which makes us owners, but on a smaller scale,
of that company. It does not matter if we have one share or thousands of shares
in the same way, we will receive part of the business dividends .
When a company has a great profitability for an excellent
financial year, it generates profits, which it grants to all its owners in a
stipulated period of time.
The company delivers these profits to its associates, as a
stimulus based on their participation in the capital stock that they have
within the company.
There are companies that do not grant these economic
benefits to their shareholders, because reinvestment in the business seems
better to them. Other companies that have mixed policies distribute some of
their profits to their shareholders and the other part is reinvested.
Business dividends do not affect the value of the company
but when they are distributed they can cause some instability due to what is
going to be distributed or not. Especially movements in its price and the
methods of change of business dividends.
All about business dividends
If the organization does not distribute the business
dividends among its investors, because it decides to reinvest the capital and
the business grows, strengthens and is doing well; then the price of the share
owned by its associates will be quoted faster.
There are shareholders who prefer those companies that pay
good dividends, for them to have that incentive gradually; they see it as a
profitable investment for the future. Possibly banks have very low interest
rates and therefore prefer to invest their money buying shares in a company.
Other partners think it is better to invest in companies
that reinvest the profits so that the business and profits grow.
The investor when buying a share or a package of shares of a
company, can research the companies in advance. This is to determine which
companies pay solid dividends or which ones reinvest the profits. The
shareholder chooses the type of company they want to associate with.
In conclusion, companies have profits that they distribute
among their shareholders and those profits that are distributed are business
dividends.