Pro Rata

Pro Rata At a certain rate; in proportion to. A pro rata dividend is declared for a period of less than a year. When rights issue allotments are made they may not be at the beginning of a company’s financial year; the pro rata dividend will cover such period as the shares have been on the company’s book. Similarly, if a company starts functioning say, in August and declares a maiden dividend, it will be proportionate to the number of months the shares have been held.

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