When someone purchases 300 shares that pay a dividend of $.12 every quarter, then the total amount of dividend income for six months will be $72.
The amount of earnings made by holding the shares of a company that is distributed by the company as a part of its profits to the shareholders is known as dividend income.
For every quarter, dividend income is 300 Γ 0.12 = $36. As a result, the income for two quarters will be 36 Γ 2 = $72. This dividend income will be over and above the returns made over the trading of shares.
Hence, the significance of dividend income is aforementioned.
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