What Are Dividends and Why Do Companies Pay Them?

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Lyrics

[Verse 1]
Companies build their treasure chest each year
Profit piles up, what happens from here?
Two paths diverge at the boardroom door
Keep it inside or share with those who own the core
Shareholders invested their cash with trust
Now the board decides what's fair and just

[Chorus]
Dividends flow like profit streams
Cash in pockets, not just dreams
D-I-V-I-D-E-N-D-S
Splitting earnings, that's the test
When companies choose to share their best
Quarterly payments heading west
To shareholders who placed their bets

[Verse 2]
Microsoft sends checks four times a year
While Amazon keeps profits crystal clear
Reinvesting every single cent
Building warehouses and server farms they rent
Different strategies, different goals
Some feed the coffers, some fill the bowls

[Chorus]
Dividends flow like profit streams
Cash in pockets, not just dreams
D-I-V-I-D-E-N-D-S
Splitting earnings, that's the test
When companies choose to share their best
Quarterly payments heading west
To shareholders who placed their bets

[Bridge]
Mature giants with cash to spare
Send regular payments through the air
Young startups hoard every dime
Growing fast through space and time
Board of directors makes the call
Distribute wealth or build it tall

[Verse 3]
Utility stocks pay steady rates
While tech firms calculate their fates
Investors seek that income stream
Or prefer the reinvestment scheme
Signal sent with every check
We're stable, strong, and pay respect

[Chorus]
Dividends flow like profit streams
Cash in pockets, not just dreams
D-I-V-I-D-E-N-D-S
Splitting earnings, that's the test
When companies choose to share their best
Quarterly payments heading west
To shareholders who placed their bets

[Outro]
Cash today or growth tomorrow
That's the choice they always borrow
Dividend policy tells the tale
Of corporate health beyond the veil

← Dividends and Share Repurchases | Dividend Irrelevance Theory (Modigliani-Miller) →