Cutting A Melon

AAA

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!

RELATED TERMS
  1. Cum Dividend

    When a buyer of a security is entitled to receive a dividend ...
  2. Declaration Date

    1. The date on which the next dividend payment is announced by ...
  3. Board Of Directors - B Of D

    A group of individuals that are elected as, or elected to act ...
  4. Record Date

    The date established by an issuer of a security for the purpose ...
  5. Dividend

    1. A distribution of a portion of a company's earnings, decided ...
  6. Dividend Policy

    The policy a company uses to decide how much it will pay out ...
Related Articles
  1. Stock Basics Tutorial
    Investing Basics

    Stock Basics Tutorial

  2. Dissecting Declarations, Ex-Dividends ...
    Investing Basics

    Dissecting Declarations, Ex-Dividends ...

  3. How And Why Do Companies Pay Dividends?
    Investing Basics

    How And Why Do Companies Pay Dividends?

  4. Why Dividends Matter
    Fundamental Analysis

    Why Dividends Matter

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center