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Financial Terms | |
Dividend limitation |
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Definition of Dividend limitationDividend limitationA bond covenant that restricts in some way the firm's ability to pay cash dividends.
Related Terms:Cash dividendA dividend paid in cash to a company's shareholders. The amount is normally based on cash dividendPayment of cash by the firm to its shareholders. constant-growth dividend discount modelVersion of the dividend discount model in which dividends grow at a constant rate. Cum dividendWith dividend. Cumulative dividend featureA requirement that any missed preferred or preference stock dividends be paid Debt limitationA bond covenant that restricts in some way the firm's ability to incur additional indebtedness. Discounted dividend model (DDM)A formula to estimate the intrinsic value of a firm by figuring the ![]() DividendA dividend is a portion of a company's profit paid to common and preferred shareholders. A stock DividendA payment a company makes to stockholders. Earnings before income tax. The profit a company made DividendThe payment of after-tax profits to shareholders as their share of the profits of the business for an accounting period. DividendA payment made to shareholders that is proportional to the number of shares dividendPeriodic cash distribution from the firm to its shareholders. DividendAs the term dividend relates to a corporation's earnings, a dividend is an amount paid per share from a corporation's after tax profits. Depending on the type of share, it may or may not have the right to earn any dividends and corporations may reduce or even suspend dividend payments if they are not doing well. Some dividends are paid in the form of additional shares of the corporation. dividends paid by Canadian corporations qualify for the dividend tax credit and are taxed at lower rates than other income. DividendUnlike dividends which are paid to company shareholders, participating insurance policy dividends are not based on the company's overall profits. Rather, they are determined by grouping policies by type and country of issue and looking at how each class contributes to the company's earnings and surplus. Dividend clawbackWith respect to a project financing, an arrangement under which the sponsors of a project Dividend clienteleA group of shareholders who prefer that the firm follow a particular dividend policy. For dividend discount modelComputation of today’s stock price which states that share value equals the present value of all expected future dividends. Dividend discount model (DDM)A model for valuing the common stock of a company, based on the dividend growth methoda method of computing the cost Dividend growth modelA model wherein dividends are assumed to be at a constant rate in perpetuity. Dividend incomeIncome that a company receives in the form of dividends on stock in other companies that it holds. Dividend payout ratioPercentage of earnings paid out as dividends. dividend payout ratioComputed by dividing cash dividends for the year dividend payout ratioPercentage of earnings paid out as dividends. Dividend policyAn established guide for the firm to determine the amount of money it will pay as dividends. Dividend PolicyThis policy governs Canada Life's actions regarding distribution of dividends to policyholders. It's goal is to achieve a dividend distribution that is equitable and timely, and which gives full recognition of the need to ensure the ongoing solidity of the company. It also specifies that distribution to individual policyholders must be equitable between dividend classes and policyholder generations, and among policyholders within any class. Dividend rateThe fixed or floating rate paid on preferred stock based on par value. Dividend reinvestment plan (DRP)Automatic reinvestment of shareholder dividends in more shares of a Dividend rightsA shareholders' rights to receive per-share dividends identical to those other shareholders receive. Dividend yield (Funds)Indicated yield represents return on a share of a mutual fund held over the past 12 dividend yield ratioCash dividends paid by a business over the most Dividend yield (Stocks)Indicated yield represents annual dividends divided by current stock price. DividendsAmounts paid to the owners of a company that represent a share of the income of the company. DividendsProfits paid out to shareholders by a corporation. Dividends per shareAmount of cash paid to shareholders expressed as dollars per share. Dividends per sharedividends paid for the past 12 months divided by the number of common shares Ex-dividendThis literally means "without dividend." The buyer of shares when they are quoted ex-dividend Ex-dividend dateThe first day of trading when the seller, rather than the buyer, of a stock will be entitled to ex-dividend dateDate that determines whether a stockholder is entitled to a dividend payment; anyone holding stock before this date is entitled to a dividend. Extra or special dividendsA dividend that is paid in addition to a firm's "regular" quarterly dividend. Homemade dividendSale of some shares of stock to get cash that would be similar to receiving a cash dividend. Indicated dividendTotal amount of dividends that would be paid on a share of stock over the next 12 months information content of dividendsdividend increases send good news about cash flow and earnings. dividend cuts send bad news. Limitation on asset dispositionsA bond covenant that restricts in some way a firm's ability to sell major assets. Limitation on liensA bond covenant that restricts in some way a firm's ability to grant liens on its assets. Limitation on merger, consolidation, or saleA bond covenant that restricts in some way a firm's ability to Limitation on sale-and-leasebackA bond covenant that restricts in some way a firm's ability to enter into Limitation on subsidiary borrowingA bond covenant that restricts in some way a firm's ability to borrow at Liquidating dividendPayment by a firm to its owners from capital rather than from earnings. MM dividend-irrelevance propositionTheory that under ideal conditions, the value of the firm is unaffected by dividend policy. Perfect market view (of dividend policy)Analysis of a decision on dividend policy, in a perfect capital Preferred Stock Stock that has a claim on assets and dividends of a corporation that are priorto that of common stock. Preferred stock typically does not carry the right to vote. Residual dividend approachAn approach that suggests that a firm pay dividends if and only if acceptable Signaling view (on dividend policy)The argument that dividend changes are important signals to investors Special dividendAlso referred to as an extra dividend. dividend that is unlikely to be repeated. Stock dividendPayment of a corporate dividend in the form of stock rather than cash. The stock dividend stock dividendDistribution of additional shares to a firm’s stockholders. Tax differential view ( of dividend policy)The view that shareholders prefer capital gains over dividends, Traditional view (of dividend policy)An argument that "within reason," investors prefer large dividends to With dividendPurchase of shares in which the buyer is entitled to the forthcoming dividend. Related: exdividend. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |