What is a dividend clawback?

Dividend Clawback is a situation where investors pay off part of their dividends to replace cash shortcomings in a particular project. Such a provision helps to maintain investors personally entrusted to the project, both for short -term and long -term. There are a number of reasons why an investor can agree with such a provision. In many cases, there may be a chance to pay dividends within this time framework. As long as the project is fine without significant exceeding, these dividends will be paid as planned. However, if it is exceeded, the dividend clawback will be used to balance these exceeding. As long as the project stays in the budget, there will never be a dividend. Furthermore, dividends will continue normally whenever the apoca is due is the project in good condition.

Dividend Clawback helps all investors interest in the project. There is strength in numbers, so the more people who pay attention to the situation and the greater the pressure that can be packed on things will probably beprobably a project. Therefore, dividend clawback creates an attitude that all investors have something to risk and get.

It should be noted that many projects often include budget for emergency measures, maybe 10 to 15 percent of the total project costs. Such exceeding will probably not require that the dividend clawback should be used simply because these other expenses, even if they were unforeseen, were put into the budget. In some cases, therefore, it may take the main cost to exceed the required dividend clawback, as the emergency budget would be spent before a dividend clawback required. If the end of the Clawback is a necessary end, it can only be used to cover the costs associated with the project currently and cannot be used for other projects.

Although dividends are usually paid every quarter, investors who are worried about Clawback may beTo want to be before their repayment. It may be better to save them in the bank until the whole project is completed. Otherwise, the investor could find himself in a difficult situation where the assets must be liquidated to pay for the dividend. It should be noted that the investor with his own capital cannot be responsible for paying more than previous dividends in total.