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A dividend is a payment from a company to its shareholders. They receive it without compensation and remain owners of their shares. It is the shareholders themselves, gathered in a general meeting, who can decide to attribute it to themselves, for example, if they feel that the company they own has enough to give them cash without affecting its functioning.

For example, if the company accumulates money without using it and they want to recover the money to invest elsewhere.

From the point of view of a shareholder, the payment of a dividend does not in itself constitute an enrichment: the dividend it receives is offset by the decrease in value of its shares caused by the sale of assets that constitute this payment. Paying a dividend actually amounts to liquidating a part of the business, turning a part of the business into cash. In fact, the word dividend also refers to the amount that shareholders receive when they liquidate a company (liquidation bonus). The enrichment of the shareholders is prior to the payment of the dividends, which merely transfers to the shareholders all or part of the profits previously realized.

The payment of dividends can increase the money available for investments provided that the beneficiaries of these dividends reinvest them. But this system is sometimes criticized because it relies on the freedom of the shareholders to decide what to do with the money received as a dividend.

Dividends can also limit the growth of the company. In addition, with foreign shareholders, they create the illusion of a capital flight (but in reality, the foreign shareholder has brought foreign capital higher than the amount of the dividend when the acquisition of its stake).

Traditionally, dividends are paid by large companies that have ended up winning their markets and are not making large investments. Such companies may even have the policy of paying regular dividends, whether or not combined with share buybacks.

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