Cash dividend

A cash dividend is a cash payment that is extended to shareholders by the issuing company. Dividends are normally paid according to terms that are outlined in the bylaws of the corporation, unless the board of directors works with the shareholders to defer payments for a period of time. Generally, cash dividends are paid out of the profits earned by the corporation during the period cited, although it is possible for a cash dividend to be paid even when there is no net profit for the fiscal period under consideration.