What is a final dividend?

A final dividend refers to the dividend declared by a company's board of directors after the company has issued its full-year financial statements for its fiscal year.

The final dividend is typically larger than any interim dividends that may have been issued during the fiscal year; this is because the board of directors is not sure of the entire amount of cash that is available for distribution to shareholders until the final results are available for the full year, and so it tends to be conservative in the size of any interim dividends that are issued. The amount of the final payment is a fixed amount per share of common stock, and is typically made known to the public during the annual shareholders' meeting.

The term final dividend is used more frequently in Europe than in the United States.

The term final dividend can also refer to the final, liquidating dividend issued to shareholders when a company is terminating its existence, but this type of dividend is more commonly known as a liquidating dividend.

Similar Terms

The final dividend is also known as the year-end dividend.

Related Topics

How do I account for cash dividends?
What are dividends payable?
What is an interim dividend?
What is the ex-dividend date?
Why use a stock dividend?