A dividend is the distribution of reward from a portion of the company's earnings and is paid to a class of its shareholders.
Dividends are decided and managed by the company's board of directors, though they must be approved by the shareholders through their voting rights
Calculation of dividends
find out the company's - dividend per share (DPS), which is the amount paid to every investor for each share of stock they hold. Next, multiply the DPS by the number of shares you hold in the company's stock to determine approximately what you're total payout will be
They pay dividends from their profits to reward their shareholders for providing them the capital to run the business. It is up to the board of directors to determine what percentage of the earnings they use to pay dividends (or buybacks) and how much they should retain in the business.