Final Dividend

It’s the end of the fiscal year and our company is doing well. Profits and losses have been recorded, financial statements have been filed, and earnings have been declared. What comes next, other than maybe a pizza party and some balloons? Well, as famed Swedish rock group Europe announced in 1988, IT’S THE FINAL DIVIDEND.

Wait, maybe they said “countdown.” But whatever. Anyway, with fiscal year closeouts come final dividends for shareholders. What this means is that shareholders get a nice little check as a thanks for owning stock and therefore participating in a company’s earnings growth.

Here’s how it works: If we own ten shares of stock in Earbud Implants, Inc., and they announce a final dividend of $1 per share, we just made ourselves ten dollars. Boom.

It’s worth noting that not all financial dividends are paid in cash. Sometimes, a company will offer shareholders more shares as a reward, and if the company is performing really well, that might be more appealing to some folks than a check. And it’s also worth noting that, once a company declares its final dividend, they are obligated to pay out that amount. If they don’t, they can face legal action.