DEFINITION of 'Pro-Rata'

Used to describe a proportionate allocation. A method of assigning an amount to a fraction, according to its share of the whole.


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For example, a pro-rata dividend means that every shareholder gets an equal proportion for each share he or she owns. Pro-rating also refers to the practice of applying interest rates to different time frames. If the interest rate was 12% per annum, you could pro-rate this number to be 1% a month (12%/12 months).

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