STOCK DIVIDEND Definition

STOCK DIVIDEND is a dividend paid in stock rather than in cash. The additional shares can be in the form of a stock split, additional shares of the issuing company, or of a subsidiary.

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CONTRACT ALLOWANCE is the limit set within an agreement as to what is the maximum allowed of any given item covered under contract, e.g., home construction with a builder may have allowances or "limits" set in your contract that tell you how much the price of your house "allows" for things such as floor coverings, countertops, and cabinets.

PRETAX INCOME is a profitability measure that looks at a company's profits before the company has to pay income tax. This measure deducts all expenses from revenue including interest expenses and operating expenses, but it leaves out the payment of tax.

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