Private Equity Glossary


The payments designated by the Board of Directors to be distributed pro-rata among the shares outstanding. On preferred shares, it is generally a fixed amount. On common shares, the dividend varies with the fortune of the company and the amount of cash on hand and may be omitted if business is poor or if the Directors determine to withhold earnings to invest in capital expenditures or research and development. Dividends can be paid either in cash or in kind, i.e. additional shares of stock.

Cumulative – Missed dividend payments that continue to accrue.

Non-cumulative – Missed dividend payments that do not accrue.

Participating – Dividends which share (participate) with common stock.

Non-participating – Dividends which do not share with common stock.

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