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Cash dividend
Cash dividend Dividend amount actually paid out to shareholders
Companies must pay corporate tax on distributed profits. This tax is subtracted from the gross dividend before it is paid out to shareholders. The resulting amount i.e. the gross dividend minus corporate tax is called a cash dividend.
For example:
- Gross dividend: 3
- Corporate tax (25%): 0.75
- Cash dividend: 2.25
Synonyms: net dividend