Distributions of profits to holders of equity instruments in proportion to their holdings of a particular class of capital.

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A dividend is the amount paid to a shareholder from a company’s post-tax profits as a reward for investment. Dividends are proportional to the number of shares held and can be paid at regular intervals or as special dividends. They reflect the company's profitability and financial health.

Example: A beverage company declares a total dividend of £100,000, paying £2 per share. A shareholder holding 1,000 shares receives a £2,000 dividend. If the company generates higher profits the following year, it may increase the dividend payout to reward shareholders.