dividends
payments made out of a firm's earnings to its owners in the form of cash or stock
regular cash dividend
cash payment made by a firm to its owners in the normal course of business
special dividend
cash payment made by a firm to its owners as a result of a one-time event
liquidating dividend
cash payment made by a firm to its owners when some of the firm's assets are sold off
declaration
date on which the board of directors passes a resolution authorizing payment of a dividend to the shareholders
ex-dividend
date before which a new purchaser of stock is entitled to receive a declared dividend, but on or after which she does not receive the dividend
date of record
date by which a stockholder must be registered on the firm's roll as having share ownership in order to receive a declared dividend
date of payment
date on which the firm mails out its declared dividends
homemade dividend policy
ability of shareholders to undo the dividend policy of the firm and create an alternative dividend payment policy via reinvesting dividends or selling shares of stock
clientele effect
observed empirical fact that stocks attract particular investors based on the firm's dividend policy and the resulting tax impact on investors
residual dividend policy
policy under which the firm pays dividends only after its capital investment needs are met, and while maintaining a constant debt/equity ratio
target payout ratio
fraction of earnings a firm expects to pay out as dividends over the long-run
share repurchase
alternative to a cash dividend payment by the firm from its earnings to the shareholders, achieved by the firm buying some of its outstanding stock on the open market
stock dividend
payment made by the firm to its owners in the form of new shares of stock, rather than cash
stock split
increase in the firm's number of shares outstanding without any change in owners' equity
trading range
difference between the highest and lowest prices at which a stock has traded
reverse stock split
the number of shares outstanding decreases, but owners' equity is unchanged
possible consequence of the firm making a regular cash dividend payment
cash account decreases