What is difference between divided and interest in stock market ?! Please explain , THX everyone.
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Answers · 4
2
Maybe we need a financial expert - but I understand them like this:
A dividend is when the profits of a company are split up and shared between each shareholder. This amount will change each year depending on how successful the company is.
Interest is a fee paid to someone who has lent money to the business. It is usually at a fixed annual rate.
I hope that makes sense.
1
To add to what Ross said, a dividend is what you get when you buy a stock. In general, how much dividend you get is up to the management of the company. They can decide to pay you all the profits, some of the profits, or none of the profits.
Interest is what you get when you buy a debt product like a bond. The interest is usually fixed, unless you buy a floating-rate bond. Then, the interest fluctuates.
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