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Simple English definitions for legal terms
nonrecurring dividend
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A quick definition of nonrecurring dividend:
A nonrecurring dividend is a special payment made by a company to its shareholders, usually in addition to the regular dividend. It is given when the company has made exceptional profits during the dividend period. This type of dividend is not expected to happen regularly and is also known as an extraordinary dividend or special dividend. Shareholders can receive the payment in cash or additional shares.A more thorough explanation:
A nonrecurring dividend is a type of dividend that is paid to shareholders in addition to the regular dividend, usually due to exceptional corporate profits during the dividend period. It is also known as an extraordinary dividend or special dividend.
For example, if a company has a particularly profitable year, it may decide to pay a nonrecurring dividend to its shareholders on top of the regular dividend. This is a one-time payment and is not expected to be repeated in the future.
Another example of a nonrecurring dividend is when a company sells off a major asset, such as a subsidiary, and uses the proceeds to pay a special dividend to its shareholders.
Overall, nonrecurring dividends are a way for companies to reward their shareholders for exceptional performance or windfalls, but they are not a regular part of the company's dividend policy.