Liquidating dividend

Liquidating dividend

Liquidating dividend is a payment of a dividend that exceeds the company's net income. This is why it is called 'liquidating'—to pay such a dividend, the company has to sell (liquidate) some of its assets. When a liquidating dividend occurs, it is considered to be a return of investment rather than a return on investment.

This entry is incorrect. A Liquidating Dividend is the payment of a dividend in excess of Retained Earnings, not Net Income. Once Retained Earnings is "used up," Capital accounts such as Additional paid in capital are decreased.

ee also

*Dividend cover
*Dividend tax
*Dividend units
*Dividend yield
*Special dividend

External links

* [http://www.wku.edu/~jack.hall/liqdiv.htm ACCOUNTING FOR LIQUIDATING DIVIDENDS (US GAAP)]
* [http://biz.yahoo.com/seekingalpha/070717/41283_id.html?.v=1 Atlantic Coast Entertainment Holdings: Liquidating Dividend Offers a Profit]
* [http://www.ereleases.com/pr/20050324005.html AMC Financial Holdings, Inc. Announces Liquidating Dividend]
* [http://dividendinformation.com Dividend Information] A searchable database of dividend payouts and history for all stocks.


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