An equalizing dividend is a dividend that is paid out to shareholders in order to equalize their ownership stake in a company. When a company raises new capital through the sale of new shares, existing shareholders may see their ownership stake in the company diluted. To make up for this dilution, the company may pay out an equalizing dividend to existing shareholders. This type of dividend is also sometimes referred to as a "dividend recap."
What is dividend Equalisation Reserve?
A dividend equalisation reserve is a type of share reserve created by a company in order to maintain a constant level of dividend payments to shareholders. This reserve can be used to top up dividend payments in years when the company's profits are lower than expected, or to buy back shares when the company's profits are higher than expected.
Dividend equalisation reserves are relatively rare, and are most often found in companies with a long history of stable dividend payments.
What is Equalisation interest? Equalisation interest is the amount of money that a shareholder is entitled to receive from a company when the company pays out a dividend. The amount of equalisation interest that a shareholder receives is based on the number of shares that the shareholder owns in the company.
Which one of the following is Utilised for distribution of dividend?
The distribution of dividends is typically done by the company's board of directors. They will determine how much of the company's profits will be distributed to shareholders, and then the board will vote on the distribution. The distribution of dividends is typically done on a per-share basis, so each shareholder will receive a dividend based on the number of shares they own. What is a high water mark in finance? A high water mark is the highest level that an investment has reached during a certain time period. For dividend stocks, the high water mark is the highest stock price that the company has reached during the past year. If the stock price falls below the high water mark, the company is not eligible to pay a dividend. Is dividend Equalisation reserve a specific reserve? Dividend Equalisation reserve is not a specific reserve. It is a general reserve which can be used for any purpose.