Pro rata is a Latin term that means "in proportion." In the context of finance and business, it refers to the allocation of something, such as assets or liabilities, in proportion to each individual's share or stake in the company.
For example, if a company has $1,000 in assets and three shareholders with stakes of 30%, 40%, and 30%, respectively, the pro rata allocation of the assets would be $300 for the first shareholder, $400 for the second, and $300 for the third.
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