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Chris W. Rea
Chris W. Rea
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Why do alot ofmany British companies offer a scrip dividendsdividend option in lieu of cash?

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Derrick
Derrick
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Why do alot of British companies offer scrip dividends?

Some stocks like GlaxoSmithKline, HSBC, Tesco, Unilever all offer dividends every quarterly/yearly, with the option of scrip dividend (opting to use the dividend to purchase shares).

Why would companies keep diluting their share? I can possibly understand if it is a one-off basis, but it seems every quarterly/yearly dividend those companies issue, they give you a scrip dividend option.

Why would they want to dilute their shares/increase their share holdings? Is this something like the reverse of buybacks? And if I take the cash, the share price of my shares will get less.