Definition of Liquidating dividend:
A liquidating dividend is also called liquidating distribution.
If a company is claiming bankruptcy or will cease business operations, the company will issue this type of payment to shareholders. Payments are based on how many shares a shareholder has in the company.
A liquidating dividend is a type of payment that a corporation makes to its shareholders during a partial or full liquidation. For the most part, this form of distribution is made from the company's capital base. As a return of capital, this distribution is typically not taxable for shareholders. A liquidating dividend is distinguished from regular dividends that are issued from the company's operating profits or retained earnings.
Meaning of Liquidating dividend & Liquidating dividend Definition