pro rata
adverb
-ˈrä-
-ˈra-
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The Latin phrase prō ratā, meaning "in proportion," is a shortening of prō ratā parte/portiōne, meaning "according to the fixed proportion." English users borrowed the shorter phrase in the 16th century, dropping the diacritics along the way, and began applying the term in contexts formal enough that Latin doesn't seem too out of place: in finance and law. There pro rata refers to distributing or allocating a quantity proportionately—for example, dividing up an annual interest rate pro rata into monthly rates; distributing pro rata a profit amongst shareholders; paying part-time employees pro rata (according to full-time pay); or allocating liability for a defective product pro rata. In the early 19th century, pro rata demonstrated its usefulness as an adjective, as in "a pro rata share" or "pro rata distribution." The verb prorate (based on pro rata) followed soon thereafter. Incidentally, the familiar noun and verb rate (as in "tax rates" and "rating on a scale of 1 to 5") also trace back to Latin prō ratā parte, but they entered the language back in the 15th century by way of Anglo-French.
Examples of pro rata in a Sentence
Quartz Bot, Quartz, 20 Nov. 2024
Such a transaction is called pro rata, which allows an investor such as PIF to participate in future rounds of financing and retain its ownership stake.
—Michael Wayland, CNBC, 21 Oct. 2024
Passive indices hold to their prescribed rules and buy or sell in a pro rata fashion as dollars flow in or out.
—Joel Shulman, Forbes, 14 Oct. 2024
The transaction was expected to be executed through distribution of shares of the Worldpay to FIS shareholders on pro rata basis.
—Joe Cornell, Forbes, 28 Mar. 2024
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Cite this Entry
“Pro rata.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/pro%20rata. Accessed 28 Nov. 2024.
Copy CitationKids Definition
pro rata
adverb
-ˈrät-ə
Legal Definition
pro rata
adverb
Latin
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