distribution

(noun)

A probability distribution; the set of relative likelihoods that a variable will have a value in a given interval.

Examples of distribution in the following topics:

  • Methods of Paying Dividends

    • Dividends, which are distributed based on how many shares each person owns, can be paid using cash, stock, or other company property.
    • For each share owned, a declared amount of money is distributed.
    • Financial assets with a known market value can be distributed as dividends; warrants are sometimes distributed in this way.
    • A common technique for "spinning off" a company from its parent is to distribute shares in the new company to the old company's shareholders.
  • Relationship Between Dividend Payments and the Growth Rate

    • One such fundamental that that investors take into account is how much capital is distributed to investors, and conversely how much capital is kept from investors.
    • Capital is distributed to investors via dividend payments and, indirectly, through capital gains.
    • Such firms are usually unable to distribute earnings, since their funds are tied up in maintenance, repairs, et cetera.
    • These firms are attractive to investors, even though there is relatively low distribution of profits.
  • Monte Carlo Simulation

    • Each potential factor is assigned a probability or statistical distribution.
    • The investor may also estimate that the inflation rate is normally distributed around a mean of 3% and standard deviation of 0.5%.
    • The investor estimates the probability or distribution of every factor that could change the result of the investment.
    • Then, he essentially uses the distributions to run many many simulations of all the inputs to see how they affect the output and then finds the average output .
    • By running many simulations based on the probability or distribution of an input (x), the analyst can see the average output (y).
  • Other Comprehensive Income

    • Accumulated Other Comprehensive Income (AOCI) is all the changes in equity other than transactions from owners and distributions to owners.
    • Other comprehensive income, disclosed in the stockholder's equity section, is the total non-owner change in equity for a reporting period or all the changes in equity other than transactions from owners and distributions to owners.
  • Claim to Income

    • In the cases of bankruptcy and dividend distribution, preferred stock shareholders will receive assets before common stock shareholders.
    • In general, preferred stock will be given some preference in assets to common assets in the case of company liquidation, but both will fall behind bondholders when asset distribution takes place.
  • Residual Dividend Model

    • The Residual Dividend Model first uses earnings to finance new projects, then distributes the remainder as dividends.
    • The company first determines which new projects it wants to finance, dedicates funds to those projects, and then distributes any leftover profits to its shareholders as dividends.
  • Free Cash Flow

    • Free cash flow (FCF) is cash flow available for distribution among all the securities holders of an organization.
    • In corporate finance, free cash flow (FCF) is cash flow available for distribution among all the security holders of an organization.
  • Dividend Payments and Earnings Retention

    • The dividend payout and retention ratios offer insight into how much of a firm's profit is distributed to shareholders versus retained.
    • On the other hand, retained earnings refers to the portion of net income which is retained by the corporation rather than distributed to its owners as dividends.
    • For each share owned, a declared amount of money is distributed.
  • ROE and Potential Limitations

    • Return on equity measures the rate of return on the ownership interest of a business and is irrelevant if earnings are not reinvested or distributed.
    • The true benefit of a high return on equity comes from a company's earnings being reinvested into the business or distributed as a dividend.
    • In fact, return on equity is presumably irrelevant if earnings are not reinvested or distributed.
  • Pros and Cons of a Corporation

    • As with partnerships, the income, deductions, and tax credits of an S corporation flow through to shareholders annually, regardless of whether distributions are made.
    • Payments to S shareholders by the corporation are distributed tax-free to the extent that the distributed earnings were previously taxed.
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