What is a 'Special Dividend'

A special dividend is a non-recurring distribution of company assets, usually in the form of cash, to shareholders. A special dividend is larger compared to normal dividends paid out by the company. Also referred to as an "extra dividend".

BREAKING DOWN 'Special Dividend'

Generally, special dividends are declared after exceptionally strong company earnings results as a way to distribute the profits directly to shareholders. Special dividends can also occur when a company wishes to make changes to its financial structure or to spin off a subsidiary company to its shareholders. For example, GenTek Inc. issued a special cash dividend of $31 per share on Mar 16, 2005, in order to restructure toward a more debt-based financing mix.

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