extra dividend

Extra Dividend

A non-recurring distribution of company assets, usually in the form of cash, to shareholders which is of unusually large size or different date of issue compared to normal dividends paid out by the given company. Also referred to as a "special dividend".

Notes:

Generally, extra dividends are declared following exceptionally strong company earnings results, as a way for a company to distribute exceptional profits directly to shareholders. Extra dividends can also occur when a company wishes to make changes to its financial structure or to spin-off a subsidiary company to its shareholders. For example, GenTek Inc issued a special cash dividend of $31 per share paid on Mar 16, 2005, in order to restructure towards a more debt-based financing mix.

See also: Corporate Action, Declaration Date, Dividend, Dividend Policy, Dividend Yield, Ex-Date, Payment Date

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Extra Dividend

A temporary increase in a firm's dividends beyond the normal level.

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extra dividend

A nonrecurring additional payment to stockholders that is brought about by special circumstances. An extra dividend may be issued when a firm in a cyclical industry has an especially profitable period and wishes to distribute some extra funds to its stockholders. Also called extra, special dividend.