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Simple English definitions for legal terms
bond dividend
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A quick definition of bond dividend:
A bond dividend is when a company gives its shareholders a bond instead of money or property. A dividend is a part of a company's profits that is given to its shareholders. It can be in the form of cash or additional shares. A cumulative dividend grows from year to year when not paid and is usually on preferred shares. A noncumulative dividend does not accrue for the benefit of a preferred shareholder if there is a passed dividend in a particular year or period. A stock dividend is a dividend paid in stock expressed as a percentage of the number of shares already held by a shareholder.A more thorough explanation:
Definition: A bond dividend is a type of dividend in which a shareholder receives a bond instead of cash or additional shares.
Example: If a company declares a bond dividend, a shareholder may receive a bond that can be redeemed for cash at a later date instead of receiving a cash payment or additional shares.
This example illustrates how a bond dividend is a way for a company to distribute earnings or profits to its shareholders in a non-traditional way. Instead of receiving cash or additional shares, shareholders receive a bond that can be redeemed for cash at a later date.