dividend requirement

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Dividend requirement

The annual earnings minimum required for payment of dividends on a preferred stock.

Dividend Requirement

The earnings of a publicly-traded company that the company has contractually obliged itself to pay out as dividends for preferred stockholders. Most of the time, when a company issues preferred stock, it guarantees buyers a certain dividend. This can be beneficial as it may attract buyers, but at the same time the dividend requirement can put a financial strain on the company. See also: Payout Rate, Plowback Rate.

dividend requirement

Total annual preferred dividends to be paid by a company.
References in periodicals archive ?
In addition to the preferred stock not having a required dividend right, the preferred stock will not have any preferences over the company's common stock, including no liquidation preference rights.
2 billion of that being its required dividend payment to the Treasury under the Senior Preferred Stock Purchase Agreement.
CPAs should determine the required dividend yield by performing an analysis similar to a market-based approach and comparing the preferred stock's dividend rate with that of a publicly traded stock.
The corporation may not have sufficient cash to pay the required dividend.