Meaning & use
scrip dividend
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Meanings
nouncountablebusinessfinancespecialist
A dividend paid to shareholders in the form of extra shares or a promise of shares, rather than in cash.
Grammar: Countable: you can say 'a scrip dividend' or 'scrip dividends'.
Patterns
- pay a scrip dividend
- receive a scrip dividend
- a scrip dividend of something
The company offered a scrip dividend instead of cash to save money.
Shareholders who chose the scrip dividend received additional shares.
A scrip dividend can increase your holding without you buying new shares.
nouncountablebusinessfinancespecialist
A document that entitles the holder to receive shares at a later date, often used in place of an immediate share issue.
Grammar: Countable: often appears as 'a scrip dividend' or 'scrip dividends'.
Patterns
- issue a scrip dividend
- a scrip dividend certificate
The firm issued a scrip dividend that could be redeemed for shares later.
He kept the scrip dividend certificate in a safe place.
Scrip dividends are sometimes used when a company wants to keep cash.
Word forms
| plural | scrip dividends |
|---|
Common combinations
- cash dividend
- Many investors prefer a cash dividend to a scrip dividend.
- stock dividend
- A stock dividend is similar to a scrip dividend but usually paid in shares directly.
- dividend reinvestment plan
- A dividend reinvestment plan automatically buys more shares, unlike a scrip dividend.
- pay a dividend
- The board decided to pay a dividend in scrip form.
Synonyms and how they differ
- stock dividend
- A stock dividend is paid in additional shares, while a scrip dividend may involve a promise of shares or a certificate.
- share dividend
- Share dividend is a broader term for any dividend paid in shares; scrip dividend is more specific to the document or promise.
Opposites
Word family
Commonly confused: scrip dividend or stock split? scrip dividend or bonus issue?
scrip dividend vs stock split
A stock split increases the number of shares but does not pay out profits; a scrip dividend is a form of dividend payment.
scrip dividend vs bonus issue
A bonus issue gives free shares to existing shareholders, often similar to a scrip dividend, but the terms are not always interchangeable.
Practice
Which sentence uses 'scrip dividend' correctly?
Choose one answer.
A scrip dividend is paid in shares or a promise of shares, not cash or groceries. Option 3 is wrong because it is not a loan; option 4 contradicts the definition.
Make it your own
Write a sentence using “scrip dividend”, then check it and compare it with the examples above.