GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Dividend


Synonyms:allotment, allowance, gain, profit, returns, share
Filed Under: financial-banking, investments, taxation
Tags: banking, investment, taxes
 

Definition of dividend

dividend
1. The distribution of earnings to shareholders. Income earned through dividends is considered a capitals gain and is taxed differently than other forms of income. In credit unions, dividends are the money paid to members for deposits, similar to the interest banks pay to their customers for deposits.

Related Terms and Acronyms:

  • equity   The value of a property minus outstanding mortgage debt and other liens.
  • financing expenses   Expenses sustained from interest payments, financing, and dividends to shareholders.
  • paid-up additional insurance   The option for a policyholder to purchase additional insurance coverage with additional premiums or policy dividends.
  • passive activity   An activity in which a person does not materially participate such as real estate rentals and limited partnerships.
  • rate of return (ROR, RR)   The profit an investment generates, expressed as equity divided by cash flow.
  • return on equity (ROE)   A ratio that shows how profitable a company is when compared to shareholder equity.
  • return on investment (ROI)   The profit an investment generates, expressed as equity divided by cash flow.
  • share certificate   A certificate of deposit issued by a credit union that pays a specific dividend if held for a specific period. It's the credit union equivalent of a certificate of deposit. A penalty is usually assessed if all or any of the principal is withdrawn before maturity.
  • vanishing premium policy   A life insurance policy where policy dividends are used to pay the policy's premiums.
  • with-profits policy   Insurance that pays the policyholder a portion of the insurer's profits.

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