What Is Dividend Imputation? Dividend imputation is a tax policy used in Australia and several other countries that eliminates the double taxation of cash payouts from a corporation to its shareholders. The argument behind dividend imputation is that dividends, as customarily handled under tax law, are an example of double taxation. That is, a corporation
What Is the Dividend Irrelevance Theory? The dividend irrelevance theory posits that dividends don’t have any effect on a company’s stock price. A dividend is typically a cash payment made from a company’s profits to its shareholders as a reward for investing in the company. The dividend irrelevance theory goes on to state that dividends
What Is a Dividend Policy? A dividend policy is the policy a company uses to structure its dividend payout to shareholders. Some researchers suggest the dividend policy is irrelevant, in theory, because investors can sell a portion of their shares or portfolio if they need funds. This is the dividend irrelevance theory, which infers that dividend payouts minimally affect
What Is a Dividend Rate? The dividend rate is the total expected dividend payments from an investment, fund or portfolio expressed on an annualized basis plus any additional non-recurring dividends that an investor may receive during that period. Depending on the company’s preferences and strategy, the dividend rate can be fixed or adjustable. Dividend rate is closely
What Is the Dividends Received Deduction (DRD)? The dividends received deduction (DRD) is a federal tax deduction in the United States that is given to certain corporations that get dividends from related entities. The amount of the dividend that a company can deduct from its income tax is tied to how much ownership the company
What Is a Dividend Rollover Plan? A dividend rollover plan—also known as a dividend capture strategy—is an investment strategy in which the investor purchases a dividend-paying stock shortly before its ex-dividend date. The investor then sells the shares shortly after the dividend is paid, hoping to secure a short-term income stream. Key Takeaways A dividend
What Is Dividend Selling? Dividend selling refers to a dishonest sales tactic used by some unethical brokerage firms. It consists of recommending the purchase of a dividend-paying company to a client, shortly before the payment date of that dividend. This sales pitch, which would typically be made to financially unsophisticated clients, involves conveying the impression
What Is Disruptive Innovation? Disruptive innovation refers to the innovation that transforms expensive or highly sophisticated products or services—previously accessible to a high-end or more-skilled segment of consumers—to those that are more affordable and accessible to a broader population. This transformation disrupts the market by displacing long-standing, established competitors. Key Takeaways Disruptive innovation refers to
What Is Disruptive Technology? Disruptive technology is an innovation that significantly alters the way that consumers, industries, or businesses operate. A disruptive technology sweeps away the systems or habits it replaces because it has attributes that are recognizably superior. Recent disruptive technology examples include e-commerce, online news sites, ride-sharing apps, and GPS systems. In their
What Is Dissaving? Dissaving is spending money beyond one’s available income. This may be accomplished by tapping into a savings account, taking cash advances on a credit card, or borrowing against future income via a payday loan. Understanding Dissaving To state it concisely, dissaving is living beyond one’s means. Negative savings is another term associated
