Equalising Dividend

An equalising dividend is a special payment made to shareholders who recently purchased shares to compensate them for not receiving the last regular dividend. It ensures that new shareholders receive the same total dividend income as existing shareholders during a dividend period. This practice is common in investment trusts and companies that aim to treat all shareholders fairly, regardless of when they acquired their shares. Equalising dividends help maintain investor confidence by ensuring equity in dividend payments among all shareholders.

Example

An investment trust issues an equalising dividend to new shareholders who bought shares after the last dividend payout date, aligning their dividend income with that of existing shareholders.