A portion of the principal, or profits, divided among several owners of a thing, usually corporate profits that are distributed to the shareholders. 2. The term is usually applied to the division of the profits arising out of bank or other stocks; or to the division, among the creditors, of the elects of an insolvent estate. 3. In another sense, according to some old authorities, it signifies one part of an indenture.
Law Dictionary – Alternative Legal Definition
A fund to be divided. The share allotted to each of several persons entitled to share in a division of profits or property. Thus, dividend may denote a fund set apart by a corporation out of its profits, to be apportioned among the shareholders, or the proportional amount falling to each. In bankruptcy or insolvency practice, a dividend is a proportional payment to the creditors out of the insolvent estate.
In old English law. The term denotes one part of an indenture, (q. v.. Preferred dividend. One paid on the preferred stock of a corporation; a dividend paid to one class of shareholders in priority to that paid to another. Chaffee v. Railroad Co., 55 Vt 129; Taft v. Railroad Co., 8 R. I. 310, 5 Am. Rep. 575. Scrip dividend. One paid in scrip, or in certificates of the ownership of a corresponding amount of capital stock of the company thereafter to be issued. Bailey v. Railroad Co., 22 Wall. 604, 22 L. Ed. 840. Stock dividend. One paid in stock, that is, not in money, but in a proportional number of shares of the capital stock of the company, which is ordinarily increased for this purpose to a corresponding extent. Ex dividend. A phrase used by stock brokers, meaning that a “sale of corporate stock does not carry with it the sellers right to receive his proportionate share of a dividend already declared and shortly payable.