What Is the Dividend Payout Ratio?

The dividend payout ratio is the share of a company's profits that is provided to the shareholders in the form of cash dividends. Typically, investors don't want to see more than 60 percent of profits returned because there may not be enough left over for growth.

Why Don't All Stocks Pay Dividends?

When a company has a high growth in business, it reinvests its profits at attractive rates of return. It is better for the company to reinvest at this situation rather than giving away the dividends to the shareholders.

What Is the Dividend Tax?

Based on the total dividends an investor receives, one has to pay taxes on any dividends one earns unless one holds a stocks; this amount of tax to be paid is known as dividend tax.

How Is a Mutual Fund Different Than a Stock?

Holding a stock stands for an ownership in a business, whereas a mutual fund is effectively a trust fund which invests in bonds and stocks, etc. When one buy a mutual fund, the money is pooled with others and a professional money manager uses it to buy assets including stocks.