Capital Dividend

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Dictionary Says

Definition of 'Capital Dividend'

A type of payment by a firm to its investors that is drawn from a company's paid-in-capital or shareholders' equity, rather than from the company's earnings, as with regular dividends. Such a dividend is often paid out in instances where a dividend payment is required, but company earnings cannot facilitate such a cash payment.

Also known as a "return of capital".

Investopedia Says

Investopedia explains 'Capital Dividend'

A capital dividend is typically not taxable for shareholders, as it is viewed as a return of the capital paid in by investors. Capital dividends are not a preferred form of dividend payment for firms or investors, as they are often seen as a sign of a company struggling to generate earnings and free cash flow. Additionally, by paying out dividends from retained earnings, a company's struggles may worsen as its capital base shrinks, limiting investment and business opportunities in the future.
Search results for

'Capital Dividend'

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    http://www.investopedia.com/articles/stocks/07/dividend_implications.asp
    ... If you have purchases at different times with different basis amounts, return of
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  • Dividend Tax Rates: What Investors Need To Know

    http://www.investopedia.com/articles/06/JGTRRADividends.asp
    ... Citing dividend payments as an inefficient use of capital, corporations historically
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  • Looking Deeper Into Capital Allocation

    http://www.investopedia.com/articles/basics/07/capitalallocation.asp
    ... The capital requirements to keep up the business are known and set aside, and the
    free cash flow that is ... Dividend-paying stocks are attractive to many investors ...

  • Your Dividend Payout: Can You Count On It?

    http://www.investopedia.com/articles/stocks/05/031505.asp
    ... Cash Flow from Operations - Capital Expenditure = FCF. ... out than coming in - it was
    nowhere near generating sufficient cash flow to cover its dividend payments. ...

  • CFA Level 1 Study Guide - Corporate Finance - Dividend Theories ...

    http://www.investopedia.com/exam-guide/cfa-level-1/corporate-finance/dividend-theories.asp
    ... MM Capital Structure vs. The Tradeoff Theory of Leverage; 11.28 Signaling Prospects
    Through Financing Decisions; 11.29 Degree of Total Leverage; 11.30 Dividend ...

  • Why Dividends Matter

    http://www.investopedia.com/articles/fundamental/03/102903.asp
    ... earnings will be reinvested in expansion opportunities, giving shareholders profits
    in the form of capital gains (think Microsoft). ... Dividend Coverage Ratio ...

  • Capital Gains Tax Cuts For Middle Income Investors

    http://www.investopedia.com/articles/pf/07/capitalgains.asp
    ... According to the data, therefore, the vast majority of Americans will qualify for
    the zero capital gains and dividend taxes available from 2008 to 2010. ...

  • CFA Level 1 Study Guide - Corporate Finance - Dividend Growth Rate ...

    http://www.investopedia.com/exam-guide/cfa-level-1/corporate-finance/dividend-growth-changing-dividend-policy-effects.asp
    ... MM Capital Structure vs. The Tradeoff Theory of Leverage; 11.28 Signaling Prospects
    Through Financing Decisions; 11.29 Degree of Total Leverage; 11.30 Dividend ...

  • Triangle Capital Yields Good Results

    http://stocks.investopedia.com/stock-analysis/2011/Triangle-Capital-Yields-Good-Results-TCAP-MCGC-PNNT-BKCC-PSEC0925.aspx
    ... Attention all dividend investors in search of higher yields. If you can handle the
    idea of investing in a micro-cap, let me recommend Triangle Capital (NYSE ...

  • Dividend Yield For The Downturn

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    ... downturn. For investors looking to protect their capital, a high dividend
    yield provides a safety buffer in uncertain markets. But ...

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