cash dividend

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Cash dividend

A dividend paid in cash to a company's shareholders. The amount is normally based on profitability and is taxable as income. A cash distribution may include capital gains and return of capital in addition to the dividend.

Cash Dividend

A share in the profit of a publicly-traded company or another investment vehicle that is distributed to each shareholder in cash in proportion to the percentage of ownership in the company each shareholder has. Cash dividends contrasts with automatic dividend reinvestment, whereby companies and investment vehicles enter into agreements with shareholders to automatically buy more shares with dividends. They also differ from dividends that are paid in the form of stocks or bonds. Companies tend to pay more in cash dividends when they do not wish to reinvest profits into expanded operations. See also: Plowback ratio.

cash dividend

A dividend paid in cash (that is, by check) to holders of a firm's stock. Although the amount is usually based on profitability, it may temporarily exceed net income. Certain legal and contractual restrictions may limit a firm's ability to pay cash dividends.
What are the advantages or disadvantages of investing in firms that pay large cash dividends?

Income investors look for corporations that pay consistent, large dividends. Income can be predicted by purchasing one group of stocks that pays dividends quarterly beginning in January, one beginning in February, and one in March. Growth investors or investors in a high tax bracket may not want these stocks. They favor companies that forgo dividends to grow internally. Since dividends on stocks are taxable when paid, highly taxed investors postpone taxes by holding growth stocks and selling for gains later, rather than holding dividend paying stocks. Capital gains taxes may be lower than the ordinary tax rates on dividends.

Jeffrey S. Levine, CPA, MST, Alkon & Levine, PC, Newton, MA
References in periodicals archive ?
The cash dividend brings total cash dividends in 1998 to $0.
The record date for the regular quarterly cash dividends is March 1, 2007 and the payment date is March 15, 2007.
This dividend, combined with the company's four regular quarterly cash dividends of $0.
7% increase over the cash dividends paid for the four quarters ended 2005.
While the Board intends that Center Financial will continue to pay cash dividends for the foreseeable future, no assurances are given that the performance of the company or Center Bank will justify the payment of cash dividends by Center Financial in any given period, or that the amount of any cash dividend paid will be the same as or greater than prior cash dividends paid.
The annual cash dividend policy and the payment of future cash dividends under the policy are subject to the continuing determination by the board of directors that the policy remains in the best interests of Thomas Group's shareholders and compliance with laws applicable to the declaration and payment of cash dividends.
B) announced today that the Company's Board of Directors has determined that until June 30, 2007, the Company will continue to pay regular quarterly cash dividends on the Class B Common Stock, Series 1, that are at least 110% of any regular quarterly cash dividends that are paid on the Class A Common Stock, if any regular quarterly cash dividends are paid on the Class A Common Stock.
B) announced today that its Board of Directors has approved the payment of regular quarterly cash dividends of $0.
This is the 45th consecutive quarterly cash dividend paid since Banner instituted regular quarterly cash dividends in 1996.
The annual cash dividend policy, as amended, and the payment of future cash dividends thereunder are subject to the continuing determination by the board of directors that the policy remains in the best interests of Thomas Group's shareholders and compliance with laws applicable to the declaration and payment of cash dividends.
There can be no assurance that any additional regular quarterly or special cash dividends will be declared or paid, or of the amount or timing of such dividends, if any.
In addition to making HRZB a more attractive investment opportunity, solid and growing cash dividends are an excellent way to manage our capital level.