Definition of dividend
- Profits are distributed to shareholders as dividends.
Profits are distributed to shareholders as dividends.
the reward money was an unexpected dividend for our good deed
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'dividend.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
Let's assume Company XYZ issues some preferred stock with a $1-per-share cumulative quarterly dividend. Company XYZ also has some common stock outstanding on which the company paid a $0.50-per-share dividend last quarter.
Now let's assume a recession has taken a toll on Company XYZ's cash flow, and the board has decided to suspend dividend payments. Because the preferred shares have a cumulative dividend, once Company XYZ decides to resume making dividend distributions, it must first "catch up" on any missed dividends payments to the preferred shareholders (those outstanding the longest are paid first). Then it can resume making dividend payments to the holders of its common stock. It must do this even if it does not completely suspend the preferred dividends; reducing them creates a similar obligation.
Preferred shares that have cumulative dividends often have slightly higher rates of return than straight preferred because cumulative preferred carries the added risk of possibly not receiving regularly scheduled dividend payments.
finance : an amount of a company's profits that the company pays to people who own stock in the company
: an advantage or benefit that you get because of something you have done
mathematics : a number that is being divided by another number
What made you want to look up dividend? Please tell us where you read or heard it (including the quote, if possible).
of yeast or being unsettled or frivolous
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