Dividends, usually used by investors to measure companies’ expected earnings, are
payments made by a corporation to its shareholders. When a corporation makes a profit, it can be
received in two ways: being re-invested in the business or being paid to the shareholders as
dividends. Dividends are usually set up on a cash basis, among their varying forms. Today, many
public companies offer dividend reinvestment plans, which automatically use the cash dividend
to purchase additional shares of the company for the shareholder.