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LSDefine
Simple English definitions for legal terms
cash dividend
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A quick definition of cash dividend:
A cash dividend is when a company gives some of its profits to its shareholders in the form of money. It's like a thank you for investing in the company. Sometimes, instead of cash, the company might give out property or bonds. There are different types of dividends, like cumulative dividends that grow over time and preferred dividends that go to certain shareholders first. A passed dividend is when the company doesn't pay out a dividend even though it usually does. Overall, a cash dividend is a way for a company to share its success with the people who own a part of it.A more thorough explanation:
Definition: A cash dividend is a portion of a company's earnings or profits that is distributed to its shareholders in the form of money.
Examples:
- Regular cash dividend: A company declares a cash dividend of $0.50 per share, and a shareholder who owns 100 shares will receive $50 in cash.
- Extraordinary cash dividend: A company declares an extraordinary cash dividend of $5 per share, in addition to its regular dividend, because it had exceptional profits during the dividend period.
The examples illustrate how a cash dividend is a payment made by a company to its shareholders in the form of money. The regular cash dividend is a typical payment made by companies to their shareholders, while the extraordinary cash dividend is an additional payment made when a company has exceptional profits.