Equalizing Dividend

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DEFINITION of 'Equalizing Dividend'

An additional dividend paid to eligible stockholders when their divided income is reduced due to a change the board of directors makes to the dividend payment schedule.

INVESTOPEDIA EXPLAINS 'Equalizing Dividend'

Equalizing dividends are paid to shareholders to compensate them for any dividend income lost from the change.

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  6. Why would a company choose to pay a stock dividend instead of a cash dividend?

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