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Mansfield and Jones generally pay a quarterly dividend of $1.10 per share. Occasionally, after a financially good year, the firm will increase the dividend by $1 for one year. What type of dividend is this additional $1?

User Sahib Yar
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Final answer:

The additional $1 dividend paid by Mansfield and Jones after a good financial year is a special dividend, which is a one-time payment not guaranteed to be repeated.

Step-by-step explanation:

The additional $1 dividend that Mansfield and Jones pays out after a financially good year is known as a special dividend. This is a one-time distribution to shareholders that is separate from the regular recurring dividends the firm pays, which in this case is $1.10 per share quarterly.

Special dividends are typically issued after an exceptionally profitable period and are not guaranteed to occur in the future, distinguishing them from the expected periodic dividends.

User Xavier Sky
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