What does a dividend mean?

Answer 1

Declaring a dividend is a corporate action taken by the board of directors of a company. Usually this is done once or twice a year when the company's financial results are declared and the company has made handsome profits/revenues.

Dividend is usually declared as a % of the face value of a share.

A 100% dividend on a Rs. 1/- face value share represents a dividend of Rs. 1/- similarly a 100% dividend on a Rs. 10/- face value share represents a dividend of Rs. 10/-

Ex: You hold 1000 shares of XYZ limited with a face value of Rs. 5/- the company has declared a 50% dividend.

Then you would receive Rs. 2,500/- as dividend.