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

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Presentation transcript:

What is a dividend?

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

What is a dividend?

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?

THIS MEANS YOU GET A REGULAR INCOME (RENT) AS WELL AS GROWTH IN VALUE OVER TIME (CAPITAL GAIN).

What is a dividend? SHARES CAN BEHAVE IN THE SAME WAY.

What is a dividend?

We can do the same with our shares.

What is a dividend? 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? 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?

WE CALL THIS FIGURE THE “DIVIDEND YIELD” OF THE SHARES.