What are dividends and special dividends?

Dividend refers to the act of a company distributing cash from its profits to shareholders as dividends. Usually, the company decides whether to distribute dividends, as well as the amount and proportion of dividends, based on the profitability at the end of each financial year. The purpose of dividend is to return a portion of the company’s profits to shareholders in cash as a return on investment.

Special Dividend refers to the additional dividend that a company distributes to its shareholders in a lump sum for certain special reasons in addition to regular dividends. This type of dividend is usually irregular and the amount may be large. It is usually decided by the company to distribute these benefits reasonably under specific circumstances, such as selling assets, obtaining unconventional profits, or having excess cash reserves.