Worldwide Dividends Glossary

Cash Option – The option to take up a dividend’s payment in the form of cash.

Cum Dividend – Refers to shares that are traded on or before a particular trading day preceding the record date, when the register of eligible holders is closed for that dividend period. If the shares are purchased during that time, the purchaser will be entitled to the next dividend payment. If the shares are sold, the seller will not be entitled to the next dividend payment.

Distribution Date – See Pay Date.

Dividend - This is a payment declared by a company’s board of directors and given to its shareholders out of the company’s current or retained earnings. Although usually given as cash (cash dividend), it can also take the form of stock (stock dividend). Also called a Payout.

Dividend Arrears – Accumulated dividends on cumulative preferred stock that are deemed payable to the current holder.

Dividend Omitted – Refers to the option that a company has not to pay any dividends to its shareholders. A dividend that is scheduled to be declared, but has not been voted for by a corporation’s board of directors. The board may not vote for the dividend because the corporation is having financial problems and has determined that it is more important to conserve the cash than to pay a dividend to shareholders. Once announced to the public, if the omitted dividend is not expected, the corporation's stock price will usually decline.

Dividend Payout Ratio – Percentage of company earnings paid out as dividends.

Dividend Rate - The fixed or floating rate paid on preferred stock based on par value.

Dividend Rescinded – A dividend previously declared is consequently cancelled some as cancelled Dividend.

Ex Date – The date specified by the local stock exchange used to determine whether the buyer or seller of the security is entitled to the benefit. The seller of a security during the Ex period will normally be entitled to the benefit

Ex-Dividend – A security whereby the buyer no longer carries the right to the most recently declared dividend. This occurs when transactions take place between the announcement date and the payment date of a dividend. During this period, the seller will receive the dividend payment, not the buyer.

Pay Date – The date dividends are paid to shareholders.

Pay Rate (Gross) – The dividend amount to be paid to the shareholder before tax.

Pay Rate (Net) – The dividend amount to be paid to the shareholder before tax.

Preference Shares – Capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation. Usually does not carry voting rights. Also called Preferred Stock.

Preferred Stock – See Preference Shares.

Record Date – The last date by which stockholders must be listed on a company’s books in order to be eligible for the declaration of a dividend.

Scrip Dividend – An issuer allows holders of a share to opt to receive dividends in the form of further units of the security rather than just cash

Stock Option – The option to take up a dividend’s payment in the form of further company shares.

Withholding Tax – A tax levied by a country of source on income paid, usually on dividends remitted to the home country of the firm operating in a foreign country.