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Simple English definitions for legal terms
fixed-return dividend
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A quick definition of fixed-return dividend:
A dividend is a part of a company's earnings or profits that is given to its shareholders. It can be in the form of cash or additional shares. There are different types of dividends, such as cash dividend, stock dividend, and property dividend. A fixed-return dividend is a type of dividend that stays the same throughout the investment's life. A cumulative dividend grows from year to year when not paid, while 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 more thorough explanation:
A fixed-return dividend is a type of dividend that remains constant throughout the investment's life. It is a portion of a company's earnings or profits distributed pro rata to its shareholders, usually in the form of cash or additional shares.
For example, if a company declares a fixed-return dividend of $0.50 per share, it will pay that amount to its shareholders for every share they own, regardless of the company's financial performance or other factors.
This type of dividend is different from other types, such as cumulative dividends that grow from year to year when not paid, or extraordinary dividends paid in addition to a regular dividend because of exceptional corporate profits during the dividend period.