Payout period

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Payout period

The time period during which withdrawals from a retirement account or annuity are paid.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Payout Period

1. The period of time during which benefits on an annuity or retirement account are paid.

2. In entrepreneurship, a period of time in which cash flow is negative. This especially applies to an early part of a company's history before it has recovered start-up costs and operating expenses.

3. In stocks, dividends per share divided by earnings per share, expressed as a percentage. Stock analysts use this ratio to compute how much of a company's profits it pays in dividends, and perhaps how that compares to other, similar companies. Stockholders prefer companies that pay more in dividends.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
The longer elimination periods and/or lesser payout periods have a lower premium.
* Large firm sales usually have smaller revenue multiples and longer payout periods than small firm sales.
To keep the cash flow of the deal positive, the transaction is more likely to have a lower multiple and longer payout period for the portion of the deal that is treated as a sale.
Individual policies can have other advantages: they might offer additional benefit amounts and longer payout periods than group policies.
For employers, retaining loyal, fully trained employees longer can shorten pension payout periods and increase productivity.
Limited payouts: In addition to providing lifetime benefits, annuities with limited (generally shorter) payout periods can be purchased.
The majority of policies pay until age 65, while some have shorter payout periods, which has become a concern because of increased life expectancies.
Among the trends in this space is the lengthening of payout periods from five years to anywhere from eight to 15 years, with 10 years as a common choice.
It is still important for participants to name a designated beneficiary or beneficiaries and contingent beneficiaries when the account is established, or as soon as possible afterwards, in order to take advantage of longer possible postmortem payout periods and planning opportunities.
Smaller firms usually are paid in four to six years, and acquisitions of larger firms traditionally have longer payout periods.
Since IRS tables list the life expectancy of a 65-year-old as 20 years, anyone aged 66 or more has a half-expectancy that is less than 10 years, allowing shorter payout periods.
In many transactions, payout periods are worked out on the receivables and WIP, thus creating more room for a larger down payment to the seller.