LokiDog2

It means the dollar amount invested decreases....

Suppose say your comapany made an investment of $100 in a company ABCD Inc by buying say 20 odd shares of the company (10% stake)

Now at the yr end u recieve dividends of say 0.5$ per share, so ur total divdend amounts to $10....
Hence your total cash investment in the company reduces to 100-10 = 90$
and your cash and cash equivalents on the Balance sheet increases by 10$

BUT you still hold 20 shares of the company..your investment still worth $100(ignoring the effects of divdends recived on the stock price).....

Hope this helps!



Edited 1 time(s). Last edit at Friday, October 16, 2009 at 02:16AM by varundarji.