If you are a new investor in the stock market, you must be wondering what is a dividend. Simply put, it is the portion of profits and earnings the company disburses to its shareholders. You get these earnings when a company generates a profit and decides to pay the shareholders rather than retain it. The company can choose to disburse the dividend quarterly, half-yearly or annually.

Here is a dividend example: Say a company decides to provide an annual dividend of 5% per share with the shares valued at ₹100 each. Here, the dividend amounts to ₹5.

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