Secured Loans
A model wherein dividends are assumed to be growing at a constant rate in
perpetuity. The value of the stock equals next years dividends divided by the
difference between the required rate of return and the assumed constant growth
rate in dividends.
Dividend limitation
A bond covenant that restricts in some way the firms ability to pay cash
dividends.
Dividend payout ratio
Percentage of earnings paid out as dividends.
Dividend policy
An established guide for the firm to determine the amount of money it will pay as
dividends.
Dividend rate
The fixed or floating rate paid on preferred stock based on par value.
Dividend Reinvestment Plan (DRP)
Automatic reinvestment of shareholder dividends in more shares of a company's
stock, often without commissions. Some plans provide for the purchase of
additional shares at a discount to market price. Dividend reinvestment plans
allow shareholders to accumulate stock over the long term using dollar cost
averaging. The D.R.P. is usually administered by the company without charges
to the holder.
Dividend rights
A shareholders rights to receive per-share dividends identical to those other
shareholders receive.
Dividends per share
Dividend paid for the past 12 months divided by the number of common shares
outstanding, as reported by a company. The number of shares often is
determined by a weighted average of shares outstanding over the reporting term.
