Investing in the stock market isn't just about buying low and selling high. For many investors, dividends play a crucial role in their investment strategy. But what exactly are dividends, and how do they work? In this beginner's guide, we'll unravel the mystery of dividends. What is a Dividend? A dividend is a payment made by a corporation to its shareholders, typically in the form of cash or additional shares. It's a way for companies to distribute a portion of their earnings back to their investors. Not all companies pay dividends, especially those in growth phases that may prefer to reinvest their profits back into the business. How Dividends Work Companies that offer dividends typically do so on a regular schedule, though they're not required to issue them at all. Dividends are usually quoted in terms of the dollar amount each share receives (dividends per share). They can also be expressed as a dividend yield, a ratio that shows how much a company pays out in d...