Cutting A Melon

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DEFINITION of 'Cutting A Melon'

A slang term used to describe when a board of directors declares an additional dividend in addition to the regular distribution. The additional dividend can be in the form of cash, stock or property.

INVESTOPEDIA EXPLAINS 'Cutting A Melon'

The board of directors (BOD) is responsible for deciding how it will share the company's earnings with shareholders in the form of dividends. In most cases, dividends are issued in accordance to a set policy and are paid on preset schedule, such as annually or quarterly.

The BOD is cutting a melon when the company has earned additional income, this is the melon and distributes a portion of it to shareholders. The bigger the melon, the sweeter it tastes to investors!

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  1. What does "cutting a melon" mean?

    In finance, the word "melon" is typically used to refer to a company's earnings. "Cutting a melon", therefore, is a term ... Read Full Answer >>
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    An investor looking for a dividend-paying stock has two important dates to consider when investing in a company. The first ... Read Full Answer >>
  3. How is the ex-dividend date for a dividend on a stock determined?

    The ex-dividend date is actually determined by the appropriate stock exchange, not by the company paying the dividend. The ... Read Full Answer >>
  4. What is the average annual dividend yield of companies in the automotive sector?

    As of May 2015, using trailing 12-month data, the annual dividend yields of industries in the automotive sector are 1.01% ... Read Full Answer >>
  5. How can I find out the ex-dividend date for a stock's dividend?

    Existing shareholders of a company's stock receive notification, typically by mail, when the company declares a dividend ... Read Full Answer >>
  6. What is the average annual dividend yield of companies in the wholesale sector?

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