# About Stocks & ETFs Dividends

### Stock & ETF Dividends (Total Return)

When you hold tokenized stocks (e.g., TSLA, NVDA) or ETFs on Grand, dividends are handled via a **Total Return** model.

**Important:** When a dividend occurs, the **price** of your asset will increase. The **amount (quantity)** of tokens you hold remains the same.

#### How It Works (Example)

Let’s take a sample stock, **ACME**, and its corresponding Ondo tokenized stock, **ACMEon**.

1. **At Launch:** Both start at **$100**. You buy **1 ACMEon** token.
2. **Price Movement:** If ACME stock goes up to **$105**, your ACMEon token follows exactly.

**The Dividend Scenario:** Now, assume ACME stock declares a **dividend of $10 per share**.

* **Withholding Tax:** Let's assume a withholding tax of 50%. The net dividend received is $5 ($10 \* 50%).
* **Reinvestment:** Instead of paying you $5 cash, the system automatically reinvests this amount into the stock.
* **Result:** At a share price of $100, that $5 buys an additional 0.05 shares of underlying value.

**Your New Token Value:** Your single ACMEon token now represents the economics of **1.05 shares** of ACME stock.

* If the ACME stock price is $100, your token is worth **$105**.
* If the ACME stock price rises to $110, your token is worth **$115.50** (1.05 \* $110).

**Summary:** Over time, the price of the tokenized stock will not perfectly match the spot price of the underlying asset. Instead, the token price will be *higher*, reflecting the accumulated value of all reinvested dividends.

#### What is a total-return tracker? <a href="#what-is-a-total-return-tracker" id="what-is-a-total-return-tracker"></a>

Total-return trackers are financial assets that are designed to mirror the complete performance of an index or asset. Unlike *price* return trackers, which only capture an asset’s market value changes, *total* return trackers account for all cash flows—dividends, interest, or capital gains distributions—assuming these are reinvested to compound returns (net of applicable withholding taxes).

A total-return tracker includes:

* Price movements – gains or losses in the asset’s market value
* Income distributions – such as dividends (for stocks) or interest (for bonds)
* Corporate actions – like mergers that may affect total value ([learn more](https://docs.ondo.finance/ondo-global-markets/corporate-actions))

By capturing both capital gains and income, total-return trackers offer a more comprehensive reflection of an asset’s performance than price-only trackers.

> *Reference: For deeper technical details on dividend handling and tokenization mechanics, please refer to the official* [*Ondo Finance Documentation*](https://docs.ondo.finance/ondo-global-markets/token-and-quote-pricing)*.*


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