Introduction to Dividend for Kids and Teens
This video explains the concept of dividend in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about dividend, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
- What is dividend
- An example of dividend calculation
- Is higher dividend always better
- Why is dividend important
Howdy Wall Street Willy. We talked about EPS, or Earnings Per Share, a little while back. And then you told me about Dividends.
But what is a dividend anyway?
Dividend is the portion of a company’s profit that is distributed to stockholders. That’s what you receive if you own stock in the company.
Well, can you give me an example of a dividend?
Sure, if you own 5 stocks in the company, and the dividend is 30 cents per share, then you would receive 5 times 30 cents, or $1.50 as the dividend.
So, the higher the dividend, the better it is?
Generally speaking, yes, because it means the company is making a good profit.
But at times, a company can also pay a dividend if it is not making a profit, or if it is making less profit than is shown by the dividend.
They can pay this extra dividend from the money saved up from previous years – called reserve.
Well, why is dividend even important?
You can earn from stocks in 2 ways:
- By selling the stock at a higher price than you bought it for, and
- From dividends
So, since dividend is one way to make money from stocks, it is important.
So a company that is doing well and pays out dividends consistently can be a good investment if you’re looking for a steady income instead of the stock price increasing.
Thank you very much for telling me about a dividend Wall Street Willy
You’re welcome, Sooper Cooper. Remember, finance is your friend!
Video Featured in the Below Financial Literacy Course for Kids & Teens
Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids & Teens
Podcast: What is Dividend?
Everything you need to know about Dividend Yield: What is Dividend Yield, How is dividend yield calculated, Is dividend yield only for stocks, Do all stocks have a dividend yield, Does dividend yield change or stays the same, Why does the dividend yield change, Is dividend yield the rate of return you get from your stock investment, Should you invest in stocks that have a high dividend yield, and more.
Show notes and transcript at: https://www.easypeasyfinance.com/what-is-dividend-yield/