DEFINITION of Homemade Dividend
Homemade Dividend means dividend created by a stockholder through selling a portion of shares held. Its an opposition to a dividend received from the company that issued the stock. If investors want an income from their stocks, even if the company does not declare a dividend, they can sell a portion of their shares.
Additional meaning of Homemade Dividend:
For example if a stockholder owns 1000 shares, he can sell 10 shares to receive money equal to 1% dividend. After the sale the value of his stocks will be 1% less, but that would have been the same if the company had declared 1% dividend, because that also reduces the stock price.