What are the returns from investing in shares?
Returns from investing in shares are: a. Cash Dividends – This refers to periodic payments made by the companies to their shareholders, usually at the end of the companies financial year. The payments are made to all shareholders listed in the companies register of members as at a particular date called the companys closure date. However, it is important to note that the stock exchange adjusts the share price of the company for this payment. For instance, if a company declares a dividend of N0.50 per share, the company’s share price would be adjusted downwards by N0.50 on the companys closure date. b. Bonus/Scrip Shares – This refers to the issue of new shares by companies through the conversion of a portion of their capital and/or revenue reserves to shares. The new shares are then distributed amongst shareholders who are listed in the companys register of shareholders as at a particular date known as the company’s closure date.
