scrip dividend

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Scrip Dividend

An IOU from a publicly-traded company that is short on cash. Such a company pays dividends in scrip until it resolves its liquidity problems.
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scrip dividend

An unusual type of dividend involving the distribution of promissory notes that call for some type of payment at a future date. Scrip dividends generally signal that a firm is short of cash. Compare liability dividend.
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.