DEFINITION of 'Cash Distribution Per Unit - CDPU'

A measure, used in Canada, that refers to the amount of cash payments made to individual unitholders of a specified income trust, as designated by the Canada Revenue Agency. The ratio is calculated by taking the total amount of cash distributions divided by the total amount of unit shares issued.

Cash Distribution Per Unit (CDPU)



BREAKING DOWN 'Cash Distribution Per Unit - CDPU'

This useful ratio summarizes the amount that each single unitholder will receive as a trust payment (similar to a dividend for preferred shares). Trust payments are mandatory for income trusts as long as there are positive earnings for a particular period. The more income the trust earns, the more will be paid out in the form of trust payments. Some business analysts argue that the nearly 100% distribution of earnings before income taxes to unitholders is a negative thing for firms, as there is little money left over to re-invest into the business in order to stimulate growth.

RELATED TERMS
  1. Unitholder

    An investor who owns one or more units in an investment trust. ...
  2. Distributable Net Income - DNI

    In the case of an income trust, an amount that is transferable ...
  3. Income Trust

    An investment trust that holds income-producing assets and trades ...
  4. Alimony Substitution Trust

    A trust agreement in which a divorced person agrees to pay spousal ...
  5. Canadian Income Trust

    A type of corporate structure as designated by the Canada Revenue ...
  6. Trust Fund

    A trust fund is a fund comprised of a variety of assets intended ...
Related Articles
  1. Investing

    Unit Investment Trusts Market: 3 Trends in 2016

    Learn more about unit investment trusts (UITs), and discover some of the most common trends in the UIT market to date in the year 2016.
  2. Retirement

    How To Set Up A Trust Fund In Australia

    No, they're not just for the super-rich. But you need to know the rules.
  3. Investing

    The Basics Of REIT Taxation

    The unique tax advantages offered by these investments can translate into superior yields.
  4. Financial Advisor

    Should You Put Your Faith In A Trust?

    Many institutions want a piece of your portfolio, but trusts can provide a one-stop shop.
  5. Managing Wealth

    How to Set Up a Trust Fund in Canada

    You don't have to be rich to make use of a trust fund. Rules can be complex; here's what you'll need to discuss with your lawyer.
  6. Retirement

    How To Set Up A Trust Fund In The U.K.

    A guide to the whys and wherefores of setting up this most versatile of estate-planning instruments in the United Kingdom.
  7. Investing

    A Look Into Creating a Trust Fund With ETFs (VCIT, SDIV)

    Learn the basics of how a trust works and the two most common types. Discover how to use ETFs to fund a trust and the different strategies.
  8. Managing Wealth

    Surprising Ways a Trust Could Help Your Family

    Everything you always wanted to know about setting up trusts, in handy glossary form.
  9. Financial Advisor

    Irrevocable Trusts: New Trends You Need to Know

    Several improvements and additional provisions have been added to irrevocable trusts in recent years making them considerably more versatile than before.
  10. Managing Wealth

    How ING Trusts Have Surprising Tax Advantages

    Learn how ING trusts can be used to shield assets from state income taxes and provide additional protection for high-wealth individuals.
RELATED FAQS
  1. Can a corporation deduct dividend payments to shareholders before taxes are calculated?

    Corporations may not legally deduct the dividend payments before taxes but there is another approach - a corporate structure ... Read Answer >>
  2. How are trust fund earnings taxed?

    Trust fund earnings that are distributed are paid by the beneficiary. The trust pays taxes on retained earnings and principal ... Read Answer >>
  3. Do beneficiaries of a trust pay taxes?

    Learn how interest income from a trust is taxed, and understand when this money is taxable to the trust and when it is taxable ... Read Answer >>
Hot Definitions
  1. IRS Publication 970

    A document published by the Internal Revenue Service (IRS) that provides information on tax benefits available to students ...
  2. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  3. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  4. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  5. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  6. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
Trading Center