scrip dividend

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Scrip dividends or scrip issues are shares issue performed as a way to recompense the shareholders instead of traditional dividend.

Shareholders who receive a scrip dividend can choose between three options:

First:  to sell the subscription rights provided by the company to the issuing company in exchange for liquidity and thereby obtain a normal dividend.

Second: the shareholders can accept the subscription rights and thus increase the number of their company shares.

Third: the shareholders are allow to sell their subscription rights in the stock exchange

Advantages:

they mean an increase of the company capital

They are advantageous for people who wish to increase their position in the company.

The scrip dividend are fiscally benefit

Disadvantages:

They require an extra effort for the company.

The stock market moment may not to be the best, and perhaps could be better ways to monetize our assets if the value of the shares is going down.

Same shareholders prefer to be paid with money instead of shares.

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