return of capital(redirected from Return of investment)
Also found in: Acronyms.
Return of capital
A cash distribution resulting from the sale of a capital asset, or securities, or tax breaks from depreciation.
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A dividend that comes from what an investor has paid into a publicly-traded company, rather than from its earnings. That is, a capital dividend occurs when a company gives back what the investor has invested. It may occur when a company must pay a required dividend but earnings make it unable to do so from its profits. Capital dividends may be a sign that a company is not financially healthy. In any case, they reduce the amount of capital that the company has to invest in its operations. They are also called return of capital.
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return of capital
See capital 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.