The dividend is the token reward paid to the shareholders for their investment in the company’s equity. Depending on the profitability of the company, its shareholders get their reward in the form of dividends. Also, they get additional benefits of an increase in the stock price as per the given dividend. But the dividends as per the company’s earnings are decided by the company’s board of directors. Usually, the principal portion of the profits is given as dividends to the shareholders and the remaining profits are re-invested in its future development.