DIVIDEND WARRANT Meaning and
Definition
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A dividend warrant is a financial instrument issued by a company to its shareholders as a proof of the payment of dividends. It serves as a written order or certificate authorizing the payment of dividends to the shareholder named on the warrant.
This document is typically sent by the company to each eligible shareholder after the declaration of dividends. The dividend warrant usually contains important information such as the shareholder's name, number of shares owned, dividend amount, and the date of issue. It may also include instructions on how the shareholder can encash or deposit the warrant to receive the dividend payment.
The purpose of a dividend warrant is twofold. Firstly, as a legal document, it provides evidence that the shareholder is entitled to receive a dividend payment from the company. Secondly, it offers convenience and ease for the shareholder to claim their dividend without having to physically visit the company or its registries.
Dividend warrants were commonly used in the past before electronic modes of dividend payments became prevalent. Nowadays, many companies offer direct deposit of dividends into shareholders' bank accounts or electronic transfer through online platforms, eliminating the need for physical dividend warrants.
In summary, a dividend warrant is a written order or certificate issued to shareholders, serving as proof of entitlement to receive dividend payments from a company.
Common Misspellings for DIVIDEND WARRANT
- sividend warrant
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Etymology of DIVIDEND WARRANT
The term "dividend warrant" is derived from two separate words: "dividend" and "warrant".
1. Dividend: The word "dividend" originated from the Latin word "dividendum", which means "a thing to be divided". In the context of finance, a dividend refers to a sum of money paid regularly by a company to its shareholders out of its profits or reserves.
2. Warrant: The word "warrant" comes from the Old Northern French word "warant", meaning "to guarantee" or "to attest". It later evolved into the Middle English word "warant". In finance, a warrant is a document issued by a company that gives the holder the right to buy securities (commonly shares) at a specific price within a specific period.
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