What is a dividend?

What is a dividend?

Let’s say you bought anInvestment property. You paid $400,000 and get$400/week rental income.(That’s $400x52 = $20,800 p.a.)

What is a dividend?

$20,800RENT

What is a dividend?

$20,800RENT

You also get “capital gain” if the house increases in value over time.Let’s say your

investment increased in value

by $100,000 over 5 years.

What is a dividend?

$20,800RENT

$100,000Capital

gain

What is a dividend?

$20,800RENT

$100,000Capital

gain

THIS MEANS YOU GET A REGULAR

INCOME (RENT) AS WELL AS GROWTH

IN VALUE OVER TIME (CAPITAL

GAIN).

What is a dividend?

$20,800RENT

$100,000Capital

gain

SHARES CAN BEHAVE IN THE

SAME WAY.

What is a dividend?

$20,800RENT

$100,000Capital

gain

What is a dividend?

$20,800RENT

$100,000Capital

gain

$$$Capital gain

as share price rises

What is a dividend?

$20,800RENT

$100,000Capital

gain

$$$Capital gain

as share price rises

What is a dividend?

$20,800RENT

$100,000Capital

gain

$$$Capital gain

as share price rises

Regular $$In

dividends

What is a dividend?

$20,800RENT

$100,000Capital

gain

Investment return =

What is a dividend?

$$$Capital gain

as share price rises

Regular $$In

dividendsWe can do the same with our

shares.

What is a dividend?

$$$Capital gain

as share price rises

Regular $$In

dividends

A dividend is an amount of money

paid regularly (typically annually) by a company to its shareholders

out of its profits (or reserves).

What is a dividend?

$$$Capital gain

as share price rises

Regular $$In

dividends

Let’s say our company pays

$1.10 dividend per share each year.Let’s also say the

share price is currently $12.50

What is a dividend?

$$$Capital gain

as share price rises

Regular $$In

dividends

Investment return =

What is a dividend?Investment return

=WE CALL THIS FIGURE THE “DIVIDEND

YIELD” OF THE SHARES.