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that part of the net earnings of a corporation that is distributed to its stockholders. Dividend disbursements are based on a percentage of the par value of the stock or are a certain sum per share of no-par-value stock. They become payable only when approved by the board of directors and are usually declared at regular intervals. Obviously, dividends should not be paid unless the company has accumulated a profit or surplus. In the United States, dividends may be paid in property of various kinds, including bonds and stocks of the company or stocks of other companies first acquired for other purposes, in notes, or in cash. Dividends may be paid in stocks when the accumulated profits of a company are to be retained for reinvestment in the business. Dividends in the form of notes, often called scrip dividends, are rare; they are only paid when the company has earnings that it expects to convert into cash before the notes are due. In Great Britain, dividends are payable only in cash. Liquidation dividends are the return of the capital of a business that is being terminated. Enterprises with diminishing assets, such as mines, issue a modified form of liquidation dividend. The dividend from preferred shares of stock is a fixed percentage that must be paid before the remainder of the profit is divided among other shares. If there are not enough profits to pay the whole dividend on preferred stock, future profits may be assigned to pay back those dividends before anything is paid on common stock. Preferred stock is ranked as first and second preferred, according to the priority of its obligations. Preferred dividends differ from interest on bonds in that there is no default if the former are not paid. The term dividend is also used to refer to a fractional payment of the amount owed by a bankrupt firm to a creditor.



the part of the profit made by a stockholding company that is distributed each year among the stockholders.

On the common shares the dividend is paid out in accordance with the amount of profit made by the corporation during a given year. On the preferred shares the size of the dividend is set beforehand in the form of a fixed percentage. With the growth of the share capital the total sum of the dividend also grows, and most of it goes to the large stockholders. The growth of dividends is one of the indicators of the increased income of the parasitic class of rentiers.


A quantity which is divided by another quantity in the operation of division.


1. Maths a number or quantity to be divided by another number or quantity
2. Law the proportion of an insolvent estate payable to the creditors
3. Finance
a. a distribution from the net profits of a company to its shareholders
b. a pro-rata portion of this distribution received by a shareholder
4. the share of a cooperative society's surplus allocated at the end of a period to members
5. Insurance a sum of money distributed from a company's net profits to the holders of certain policies
References in periodicals archive ?
The Ninth Circuit wrote, "[i]n short, the question of whether the distributions to Participants in this case are deductible dividends under 404(k) depends on whether the Trust or the Participants owned the convertible preferred stock when the redemptions took place.
24411(a) provides for a deduction of 75 percent of qualified dividends in the case of a water's-edge election.
Without such rises, and without any dividends, where is the value in buying a tech stock?
But, in reality, many corporations continue to consider the dividend to be an essential component of shareholder return.
Because dividend-paying firms spread their profits around and generate regular income for shareholders, their shares are generally less volatile than those of companies that don't give dividends.
The proposed elimination of the dividend offset option seems to stem from a belief that recent changes in transfer pricing documentation requirements will soon eliminate the need for section 482 adjustments.
The existence of the DRD led to the practice of"dividend stripping," whereby a corporation would (1) purchase stock in another corporation, (2) receive a dividend and claim a DRD and (3) promptly sell the stock and sustain a capital loss on the sale, measured by the amount of the dividend (assuming there were no other price fluctuations).
As previously discussed, CAIT did not distribute any common or preferred share dividends during 2006.
Certain taxpayers in the insurance industry took the position that the (1) portions of prior CRTC [section]24410 that related to commercial domicile and limited the deduction to insurance company dividends paid from California-source income were severable from the statute; and (2) remaining portions of pre-AB 263 CRTC [section]24410 provided for a 100% deduction for dividends received from an 80%-owned insurance company.
Most of the refund claims were based on excluding foreign dividends from the tax base just as domestic dividends had been excluded.
Under section 356(a)(2) and revenue ruling 93-61, this gain is characterized as a dividend (to the extent the company has accumulated earnings and profits) if the exchange is considered a dividend.
Those companies that raised their dividends for the first quarter of 1992 were Wisconsin Energy, Texas Utilities, Consolidated Edison and Detroit Edison.