An arrangement under which sponsors of a project agree to contribute as equity any prior dividends received from the project to the extent necessary to cover any cash deficiencies.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
An agreement whereby stockholders use previous dividends to finance the future operations of the company. That is, the stockholders agree to use dividends to buy more stock in case the company becomes cash poor and needs liquidity for its operations.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved