liquidating dividend

(redirected from Liquidation Dividends)

Liquidating dividend

Payment by a firm to its owners from capital rather than from earnings.

Liquidating Dividend

A dividend paid to shareholders out of a company's capital or assets, rather than its earned income. That is, a liquidating dividend occurs when a company pays more than its total profit in dividends. This usually happens when shareholders believe that the company is no longer sustainable or profitable. Therefore, liquidating dividends are considered a return of shareholders' investments, rather than profit on them. All of the firm's debts must be paid before it can pay liquidating dividends. See also: Final dividend.

liquidating dividend

A pro rata distribution of cash or property to stockholders as part of the dissolution of a business. For example, a firm may be liquidated because the officers believe its stock price does not adequately reflect the value of its assets. All debts and other obligations usually must be satisfied before issuance of a final liquidating dividend. A stock paying a liquidating dividend is indicated in stock transaction tables in newspapers by the symbol C, next to the dividend column. See also final dividend, General Utilities Doctrine.
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The corporation has also been relentless in its debt recovery efforts particularly the debts owed to banks in liquidation so as to enhance payment of liquidation dividends to depositors whose balances are in excess of the insured limits.
In October the government injected 3.5 billion won (US$3.3 million) in public funds, including 2.7 billion won (US$2.6 million) into two savings banks, and recovered 258.2 billion won (US$245.9 million) in the form of liquidation dividends (152.3 billion won or US$145.0 million), sales of assets (10 billion won or US$9.5 million), and non-performing loan collection (87.8 billion won or US$83.6 million).