capital dividend

(redirected from Capital Dividends)

Capital Dividend

A dividend that comes from what an investor has paid into a publicly-traded company, rather than from its earnings. That is, a capital dividend occurs when a company gives back what the investor has invested. It may occur when a company must pay a required dividend but earnings make it unable to do so from its profits. Capital dividends may be a sign that a company is not financially healthy. In any case, they reduce the amount of capital that the company has to invest in its operations. They are also called return of capital.

capital dividend

A dividend considered to be drawn from paid-in capital rather than from current earnings or retained earnings. Capital dividends are generally not taxable to a stockholder when paid; rather, they are used to adjust the basis of the security downward such that a larger capital gain or a smaller capital loss will result at the time the security is sold. A capital dividend is somewhat akin to tearing boards off a house to use as firewood. If the process goes on too long, the house itself will be gone. Also called return of capital.
References in periodicals archive ?
Net unrealised capital gains on investments 2,986,059 (3,522,533) (24,753) Net realised capital gains on investments 15,412 597,637 - Income from capital dividends - 67,950 - Recoverable VAT 36,886 - - Capitalised management fees less taxation (612,738)
Some stockholders may receive a Form 1099- DIV in which American Capital dividends reported in box 1a, for 'total ordinary dividends,' are also reported in box 1b, for 'qualified dividends.
As envisaged in the Prospectus, the Company intends to pay capital dividends to
MFA's dividend policy is to generally refrain from paying return of capital dividends to stockholders, but instead to pay as dividends substantially all of MFA's taxable income.
125 Special return on capital dividends $ - $ - Total cash dividends $ 0.
Although total debt continues to grow, primarily to finance the company's aggressive capital expenditures plan and substantial capital dividends, steady increases in operating cash flows have helped the company to continuously reduce the proportion of total debt to earnings before interest, taxes, depreciation and amortization (EBITDA) from 4.
As envisaged in the Prospectus, the Board intends to pay capital dividends to
The table below summarizes the Trust's total share operating dividend and return of capital dividends for 1995 to date:
The table below summarizes the Trust's total per share operating dividend and return of capital dividends for 1994 to date:
This will favorably affect investors by enabling a greater proportion of current or future years' dividends to be shown as capital gains but may reduce future return of capital dividends," Roath noted.
One benefit of company-owned life insurance is that the proceeds increase the company's capital dividend account, which can be paid to shareholders as tax-free capital dividends.
However, Constitution Corporate "has no current plans to curtail or eliminate membership capital dividends," Nealon wrote.

Full browser ?