This is the payment a company will make based on the profits it has made. The dividends are paid out to shareholders. This earns the shareholders a return on their investment. Dividends are paid out based on the amount of shares that each shareholder owns. Often, the dividend is paid at a time the company has extra money that it doesn’t need to reinvest into the company. The corporation will decide the eligibility of a stock’s dividend based on how much it earned. Earnings don’t have to be massive, and the company doesn’t have to be private.