Chapter 17

Date of Record

The date by which a holder must be on record to be designated to receive a dividend.

Declaration Date

The date on which the board of directors passes a resolution to pay a dividend.

Regular Cash Dividend

A cash payment made by a firm to its owners in the normal course of business, usually paid four times a year.

Distribution

A payment made by a firm to its owners from sources other than current or accumulated retained earnings.

Stock Dividend

A payment made by a firm to its owners in the form of stock, diluting the value of each share outstanding.

Dividend

A payment made out of a firm's earnings to its owners, in the form of either cash or stock.

Reverse Split

A stock split in which a firm's number of shares outstanding is reduced.

Stock split

An increase in a firm's shares outstanding without any change in owners' equity.

Trading Range

The price range between the highest and lowest prices at which a stock is traded.

Date of Payment

The date on which the dividend checks are mailed.

Ex-dividend Date

The date two business days before the date of record, establishing those individuals entitled to a dividend.

Information Content Effect

The market's reaction to a change in corporate dividend payout.

Clientele Effect

The observable fact that stocks attract particular groups based on dividend yield and resulting tax effects.

Stock Repurchase

The purchase, by a corporation, of its own shares of stock; also known as a buyback.

Homemade Dividend Policy

The tailored dividend policy created by individual investors who undo corporate dividend policy by reinvesting dividends or selling shares of stock.