Legal Definitions - deferred dividend

A deferred dividend is a portion of a company's earnings or profits that is declared but not paid out to shareholders until a future date. It is a type of dividend that is postponed for payment.

For example, if a company declares a dividend in January but decides to pay it out in June, it is considered a deferred dividend. The shareholders will receive the dividend in June instead of January.

Deferred dividends are usually paid out when a company wants to retain its earnings for future investments or to pay off debts. It can also be used as a way to manage cash flow and ensure that the company has enough funds to operate smoothly.