What "dividend" means in finance

A dividend is a payment made by a corporation to its shareholders, usually in the form of cash or additional shares of stock, as a share of the company's profits. The payment is made based on the number of shares held by each shareholder. Companies typically pay dividends to reward shareholders for their investment in the company and to increase their attractiveness to potential investors. Dividends can be issued on a regular basis or as a one-time payment, and can vary in amount and frequency depending on the financial health of the company.