Understanding Dividends Mutual Funds

What does the expression "it pays dividends" refer to?

• Taking action now for future rewards

• Getting free money from generous companies

• Investing in stocks for immediate profit

• Receiving interest from savings accounts

According to the video, what are dividends?

• Payments made by companies to shareholders

• Rewards for putting money into a venture

• Interest earned on savings accounts or bonds

• Additional stock given to shareholders

Why would a company give additional stock to shareholders instead of cash dividends?

• To reward their investors for trust and cash

• To reinvest the money into the company

• To grow the company and increase profits

• To discourage shareholders from selling their stock

Which types of companies are more likely to pay dividends?

• New and rapidly growing companies

• Companies with slow growth and stability

• Companies with high return on investment

• Companies with large amounts of extra money

How are dividends seen by investors?

• Indications of stability and financial health

• Guarantees of stock price increase

• Opportunities for immediate profit

• Signs of potential risk and instability

How does a dividend work?

• Shareholders receive free money from the company

• Investors receive interest on their savings accounts

• Shareholders receive a portion of the company's profits

• Investors receive additional stock in the company

What is the average percentage of a company's stock price that is paid as dividends annually?

• 1-2%

• 3-5%

• 5-7%

• 7-10%

What are dividend reinvestment programs called?

• Stock Purchase Plans

• Dividend Growth Plans

• Dividend Reinvestment Plans

• Shareholder Investment Programs

Who decides how and when a company pays its dividends?

• Shareholders

• Board of directors

• CEO of the company

• Stock market regulators

What are qualified dividends?

• Dividends paid by U.S. companies

• Dividends paid by foreign corporations

• Dividends taxed at long-term capital gains rates

• Dividends owned for more than 60 days before the ex-dividend date