Dividend is return on equity investment, that is, distribution of profits of a company amongst equity investors.

Since dividends take away a chunk of cash from the company, companies usually pay dividends at a nominal rate (0.001% or 0.0001%). A higher rate of dividend usually is cumulative and negotiated as part of the term sheet with investors.

Different classes of shares may also be entitled to different dividend payouts. This is also usually negotiated and contracted as part of term sheets agreements.