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.

See also

• Dividend cover
• Dividend tax
• Dividend units
• Dividend yield
• Special dividend

External links

• ACCOUNTING FOR LIQUIDATING DIVIDENDS (US GAAP)
• Atlantic Coast Entertainment Holdings: Liquidating Dividend Offers a Profit
• AMC Financial Holdings, Inc. Announces Liquidating Dividend
• Dividend Information A searchable database of dividend payouts and history for all stocks.