participating dividend
Definition
Dividend paid on participating preferred stock. This is an unusual dividend structure, since it allows holders of preferred stock to receive payouts in addition to the stated dividend rate under certain circumstances. The additional payouts could be a result of either specific events (such as a takeover), or increases in payout to common stockholders. In some cases, there is a formula established that relates additional preferred stockholder payouts to increases in common stockholder payouts.
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