dividend equivalent right

Definition

A right extended to certain incentive stock option contracts that allow the option holder to receive a payment, in shares or in cash, that is equivalent to the value of dividends paid on the optioned shares between the record date of the option and its exercise date.

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Mr. Smith made a fortune on Wall Street last year by exercising the dividend equivalent right on his oil and pork futures stock option contracts.

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I receive several new shares in my company every three months because my stock options contain a dividend equivalent right clause and I would rather have the new shares than the money.

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DIVIDEND EQUIVALENT RIGHT A right extended to certain incentive stock option contracts that allow the option holder to receive a payment, in shares or in cash, that is equivalent to the value of dividends paid on the optioned shares between the record date of the option and its exercise date.

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dividend enhanced convertible stock (DECS) dividend exchange traded fund