How are dividends typically paid to shareholders?

Dividends are a portion of a company's earnings that are distributed to shareholders as a return on their investment. The most common way dividends are paid is through cash payments, where shareholders receive actual cash, typically on a quarterly basis. This cash can be used by shareholders for any purpose they choose, such as reinvesting in more shares, saving, or spending.

Although dividends can also take the form of additional shares (often referred to as stock dividends), cash payments remain the primary and most direct method of delivering returns to investors. Other options, like reducing stock price or holding shares in the company, do not actually represent a method of paying dividends and are not recognized as forms of dividend distribution. This reinforces why cash payments are considered the standard method for paying dividends to shareholders.