What Is a Scrip Dividend

question 26

Multiple Choice

What is a scrip dividend?

• A) A method by which the company can raise the level of borrowings on its balance sheet
• B) A mechanism by which the company buys a proportion of its own shares from investors
• C) An opportunity for the company to increase dividends without sending a signal that leads to a fall in the share price
• D) An opportunity for shareholders to receive additional shares in proportion to their existing holding instead of the normal cash dividend

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Definitions:

Relevance

The extent to which something is pertinent or applicable to the issue being considered.

Timeliness

The degree to which a given activity or response is done or occurs at a suitable or opportune time.

Task at Hand

The immediate job or duty that requires attention, focus, and completion by an individual or team.

Reliable Information

Information that is consistently accurate and trustworthy over time.