Yes. companies pay out dividends to its share holders from the profit they make out of their business. The more the profit the company makes the greater would be the dividends paid out to the shareholders.
Dividends are paid from corporate profits.
Profits paid to stockholders are called dividends.
Because dividend cover represents the amount of times by which dividends can be paid by profits. i.e. the company's ability to pay it's dividends. The higher the dividend cover the greater the ability of the company to pay dividends out of it's distributable profits. Dividends according to companies act legislation can only be paid out of distributable profits hence the relevance of dividend cover represents the companies ability to pay their dividends.
Those distributed profits are called dividends, because the profit is divided among the various shareholders.
The portion corporate profits paid out of stockholders is A dividend is quarterly payment to stockholders of record, as a return on investment. Dividends may be in cash, stock, or property, and are declared from operating surplus. If there is no surplus, the payment is considered a return on capital. Dividend payments are, in effect, taxed twice-once when corporate profits are taxed and again when the dividend is received by a taxpaying stockholder. The corporate profits paid out to stockholders is called dividends.
Dividends are paid from corporate profits.
Stockholders
Profits paid to stockholders are called dividends.
profits paid out as dividends
Because dividend cover represents the amount of times by which dividends can be paid by profits. i.e. the company's ability to pay it's dividends. The higher the dividend cover the greater the ability of the company to pay dividends out of it's distributable profits. Dividends according to companies act legislation can only be paid out of distributable profits hence the relevance of dividend cover represents the companies ability to pay their dividends.
stockholders
They are called dividends.
Earnings are taxed first as corporate profits, then as personal income after dividends are paid.
From retained earnings.
By definition, dividends are paid out of profits, they can not be paid out of anything else (not loans, not losses, etc). If the dividends paid exceed profits for the same period the distribution is considered a return of capital (stock basis, additional paid in captial, etc). So an overstated profit WILL reulst in "erosion of capital" if correction of the overstatement results in profits being less than dividends.
Those distributed profits are called dividends, because the profit is divided among the various shareholders.
DR Retained Profits (in BS) CR Cash/Bank (in BS)