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LSDefine
Simple English definitions for legal terms
extra dividend
Read a random definition: Modern Portfolio Theory
A quick definition of extra dividend:
An extra dividend is a special payment that a company gives to its shareholders on top of the regular dividend. This happens when the company makes a lot of money during a certain period. A dividend is a portion of the company's profits that is shared among its shareholders. It can be given in the form of cash or additional shares. A dividend can also be accumulated, which means it grows from year to year when not paid. A preferred shareholder usually receives a cumulative dividend, which must be paid in full before common shareholders receive any dividend.A more thorough explanation:
An extra dividend is a type of dividend paid by a company in addition to its regular dividend. It is usually paid when the company has exceptional profits during the dividend period. This type of dividend is also known as an extraordinary dividend or special dividend.
- A company declares a regular dividend of $0.50 per share and an extra dividend of $1.00 per share due to a significant increase in profits.
- During a particular quarter, a company earns a substantial amount of money and decides to pay an extra dividend of $2.00 per share to its shareholders.
These examples illustrate how an extra dividend is paid by a company when it has exceptional profits during a dividend period. It is an additional payment made to shareholders on top of the regular dividend.