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This means that the business sells off not just any inventory it may have, but its tools of production, building and any other assets it may have.

When a corporation decides to shut down, it liquidates its assets.

A liquidating dividend is used when a corporation is dissolving and it needs to distribute its assets to its shareholders.

Paid after satisfying all corporate debts, the liquidating dividend is meant to provide a return on investment.

The term liquidating dividend refers to the process of providing shareholders with a partial or full distribution of their capital investment in the company.

Liquidating dividends are typically paid when a company is going out of business or has sold a portion of the enterprise.