Chapter 4 - Whats In It For Me? Flashcards
What are the 3 ways you can benefit from stock market investment?
Dividends, capital gain and shareholder perks.
What is a dividend?
A dividend is what a company pays its shareholders from its remaining profits.
What is dividend cover?
Dividend cover is the amount of times over a company earns over the dividends they pay.
Give 2 reasons why dividends may be small.
A company does not have the full picture of the financial year at the half-way mark. Shareholders and directors may agree that it is better to hold off dividends now to reinvest for larger dividends later.
What is a special dividend?
It is a one-off large dividend that directors pay to shareholders. For example, there could be a large amount left over in the reserves and director decide to give a dividend.
What is ex dividend?
Ex dividend is when the shares prices decreased to reflect the dividends issued per share. This happens on the day that the dividend is paid.
What is capital gain?
Capital gain is when your shares go up in value, the increase in value is the capital gain.
What are shareholder perks?
Shareholder perks are perks that shareholders get for being a shareholder. However, the perks you receive can be dependent on the number of shares you have.
