If a company decides on paying dividends, each shareholder is entitled to receive a certain amount of money for each share they hold. Unlike debt holders who have the right to receive certain amounts of interest payments at certain dates, shareholders have no right to dividends at pre-determined dates and amounts.


As growth companies tend to need money for expandig and increasing the value of the company, they rarely pay dividends. If investors want to receive money back from their investments, they can instead sell a portion of their shares.


Dividends are decided upon by the shareholders of the company at the shareholders' meetings.