equalizing dividend

Equalizing dividend

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

Equalizing Dividend

A one-time, special dividend a publicly-traded company may declare and pay when it changes its dividend schedule. When a company changes its dividend schedule, it often deprives shareholders of income they would have received otherwise. The equalizing dividend is intended to compensate shareholders for this loss.

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.