CFA 38: Dividends and Share Repurchases Flashcards
dividend
A distribution paid to shareholders based on the number of shares owned.
payout
Cash dividends and the value of shares repurchased in any given year.
payout policy
A company’s set of principles guiding payouts.
open-market DRPs
Dividend reinvestment plan in which the company purchases shares in the open market to acquire the additional shares credited to plan participants.
new-issue DRPs
Dividend reinvestment plan in which the company meets the need for additional shares by issuing them instead of purchasing them.
extra dividend (special dividend)
Also known as an irregular dividend, is a dividend paid by a company that does not pay dividends on a regular schedule, or a dividend that supplements regular cash dividends with an extra payment.
dividend payout ratio
The ratio of cash dividends paid to earnings for a period.
liquidating dividend
A dividend that is a return of capital rather than a distrivution from earnings or retained earnings.
stock dividend (bonus issue of shares)
A type of dividend in which a company distributes additional shares of its common stock to shareholders instead of cash.
Price to Earnings Ratio (PE)
The ratio of share price to earnings per share
dividend yield
Annual dividends per share divided by share price.
reverse stock split
A reduction in the number of shares outstanding with a corresponding increase in share price, but no change to the company’s underlying fundamentals.
declaration date
The day that the corporation issues a statement declaring a specific dividend.
ex-dividend date
The first date that a share trades without the dividend.
holder-of-record date
The date that a shareholder listed on the corporation’s books will be deemed to have ownership of the shares for purposes of receiving an upcoming dividend; two business days after the ex-dividend date.
