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Scrip Issue

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Scrip Issue
A scrip issue is the process of creating new shares which are given free of charge to existing shareholders.
    
Shares given without charge to existing shareholders in proportion to the shares they already hold. A script issue is a pure bookkeeping transaction. After a scrip issue, dividends Will be divided among a large number of shares. Yet since each shareholder owns proportionately more shares, there is no net gain or net loss. To the individual investor, this is known as a scrip Dividend. This would normally be done in place of paying a Dividend. The issue would be calculated relative to existing holdings. This means that, for example, one new 'scrip' share may be issued for every ten shares currently owned.
    
The company issuing the scrip shares has NOW expanded the number of shares in existence but not increased the value of the company. This means that the relative value of each pre-existing share has been reduced slightly.
Posted by  Privatebanking.com
 
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