NEW YORK, Oct. 30, 2013 /PRNewswire/ -- Saratoga Investment Corp. (NYSE: SAR), a business development company, today announced that its Board of Directors has declared a dividend of $12.5 million, or $2.65 per share, payable on December 27, 2013 to common shareholders of record on November 13, 2013. The ex-dividend date, which is the day that the Company's stock will begin trading without the dividend, is November 8, 2013. The dividend will be paid in cash or shares of the Company's common stock at the election of the shareholders, although the total amount of cash to be distributed to all shareholders will be limited to approximately 20% of the total dividend to be paid to all shareholders. The remainder of the dividend (approximately 80%) will be paid in the form of shares of the Company's common stock. This dividend is being made in accordance with certain applicable Treasury regulations and private letter rulings on cash/stock dividends issued by the IRS over the years that allow a publicly-traded regulated investment company to satisfy its distribution requirements from a distribution paid partly in common stock provided that at least 20% of the distribution is payable in cash and certain other requirements are satisfied. The dividend includes a carry-over balance of $3.9 million from the Company's fiscal year 2013 taxable income and a significant portion of the Company's fiscal year 2014 estimated taxable income.
Each shareholder will have the opportunity to elect to receive the dividend in cash or in the Company's common stock. However, the total amount of cash to be distributed to all shareholders electing to receive their dividends in cash will be limited to approximately 20% of the total amount to be distributed to all shareholders. In the event that the amount of cash to be distributed to all shareholders electing to receive the dividend in cash would exceed 20% of the total dividend, each shareholder electing to receive cash will receive a pro rata portion of the total cash to be distributed based on the number of shares held by each such shareholder. The remainder of the dividend in excess of a shareholder's pro rata share of the total amount of cash to be distributed will be paid in the form of shares of the Company's common stock. The number of shares of our common stock to be issued to shareholders receiving all or a portion of the dividend in shares of our common stock will be based on the volume weighted average price per share of our common stock on the New York Stock Exchange on December 11, 13 and 16, 2013.
Shareholders electing to receive the dividend in shares of the Company's common stock will receive their entire dividend in the form of shares of the Company's common stock regardless of the elections made by any other shareholders.