Fractional share

Fractional share

Stocks amounting to less than one full share, usually resulting from splits, acquisitions, exchanges, or dividend reinvestment programs.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Fractional Share

Less than one share of a stock or a mutual fund. One almost always purchases fractional shares as part of a dividend reinvestment program. That is, when one automatically uses dividends to buy more shares, there may be extra cash left over but not enough to buy a full share. The company or fund sponsoring the dividend reinvestment program then allows the shareholder to buy a fractional share.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

fractional share

Less than one share of stock, that is, one-third or one-half a share. Fractional shares are generally created from dividend reinvestment plans or stock dividends. For example, if a firm's directors declare a 2% stock dividend, an owner of 70 shares would be entitled to 1.4 additional shares. Because corporations do not issue certificates including fractional shares, the stockholder would receive one share and the cash equivalent for the fractional share. Fractional shares are credited to dividend reinvestment plans.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Fractional share.

If you reinvest your dividends or invest a fixed dollar amount in a stock dividend reinvestment plan (DRIP) or mutual fund, the amount may not be enough to buy a full share.

Alternately, there may be money left over after buying one or more full shares. The excess amount buys a fractional share, a unit that is less than one whole share.

In a DRIP, a fractional share gives you credit toward the purchase of a full share. With a mutual fund, in contrast, the fractional share is included in your account value.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Further, shareholders may request to be paid in cash instead of shares by filling out an election card received from Computershare Investor Services shortly after the record date if the shares are in registered form or the bank, brokerage or nominee who holds the shares must advise the Depository Trust Company (DTC) as to their full and fractional share requirements by 23 September 2019.
Drive Wealth, a leader in digital brokerage solutions, on Thursday announced a partnership with Vested Finance, an investment advisor and trading platform, to provide fractional share capabilities for Indian retail investors.
The reverse stock split will affect all stockholders uniformly and will not alter any stockholder's percentage interest in the company's equity, except to the extent that the reverse stock split would result in a stockholder owning a fractional share.
The company will arrange for the disposition of fractional share interests of stockholders who hold fewer than 100 shares immediately prior to the reverse split by having the company's transfer agent aggregate such fractional share interests and sell the shares of common stock resulting from such aggregation in open market transactions following the effectiveness of the forward split.
Some of the clubs, such as the Four Seasons Residence Club and the Ritz-Carlton Club, are equity associations in which members purchase a deeded fractional share of a residence.
Once the company moves to ownership, whether through buying a plane outright or entering into a joint ownership agreement or a fractional share program, a plethora of tax pitfalls and planning opportunities arise.
A fractional share, a unit of stock less than one full share, cannot be traded on the market.
The bank, brokerage or nominee who holds the shares must advise the Depository Trust Company ("DTC") as to their full and fractional share requirements by September 19, 2018.
The company sales director, Emily Williams, said, 'Despite the turbulent global economy, there's never been a better time to buy a fractional share in a jet.
Buying a jet, or even a fractional share of one, can run well into the millions and require a multiyear commitment.
No fractional shares will be issued if, as a result of the reverse stock split, a stockholder would otherwise become entitled to a fractional share.
No fractional shares will be issued, instead shareholders will receive a cash payment for the fractional share interest, as per the closing price of the common stock as reported on the New York Stock Exchange on 20 June 2019.

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