DEFINITION of 'Proration'
A situation during a corporate action in which the available cash or shares are not sufficient to satisfy the offers tendered by shareholders. Therefore, a proportion of both cash and shares is granted for each offer tendered.
BREAKING DOWN 'Proration'
When you tender an offer for a corporate action, the company making the bid will attempt to fulfill the tender as you requested. However, if the company does not have enough stock or cash, a mixture will be given in order to appease all stockholders.