Cash Dividend Law and Legal Definition

Cash dividend is a dividend paid to shareholders in cash of a portion of the profits or surplus assets of a corporation. Cash dividends are distributed from current earnings or accumulated profits.

Such dividends are a form of investment income and are usually taxable to the recipient in the year they are paid. For each share owned, a declared amount of money is distributed. For instance, if a person owns 100 shares and the cash dividend is $0.50 per share, the person will be issued a cheque for $50.