equalizing dividend

Equalizing Dividend

An additional dividend paid to eligible stockholders when their divided income is reduced due to a change the board of directors makes to the dividend payment schedule.

Notes:

Equalizing dividends are paid to shareholders to compensate them for any dividend income lost from the change.

See also: Board of Directors - BOD, Declaration Date, Dividend, Dividend Policy, Holder of Record, Stockholder's Equity

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Equalizing dividend

Special dividends received by investors of a firm for income the investor lost because the firm altered the dividends payment schedule.

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equalizing dividend

A dividend payment that is intended to compensate for a change in regular dividend dates. For example, a firm may move back its dividend payment dates by one month and compensate its shareholders with a one-time equalizing dividend to account for the four-month, instead of the normal three-month, interval before the first payment under the new schedule.