Meaning & use
scrip issue
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Meaning
nouncountableBritishfinance
A free issue of extra shares to existing shareholders, given instead of a cash dividend, in proportion to their current holding.
Grammar: Countable: 'a scrip issue', 'two scrip issues'. Often used with 'make' or 'announce'.
Patterns
- make a scrip issue
- announce a scrip issue
- a scrip issue of shares
The company made a scrip issue of one new share for every five held.
Instead of paying cash, the board announced a scrip issue to reward loyal investors.
A scrip issue increases the number of shares but not the total value of the company.
Word forms
| plural | scrip issues |
|---|
Common combinations
- make a scrip issue
- The firm decided to make a scrip issue rather than pay a dividend.
- announce a scrip issue
- They announced a scrip issue at the annual meeting.
- scrip issue of shares
- The scrip issue of shares was welcomed by small investors.
- free scrip issue
- A free scrip issue means you get extra shares without paying.
Synonyms and how they differ
- bonus issue
- Bonus issue is a close British synonym, often used when the shares are given in place of a dividend.
- stock dividend
- Stock dividend is the common American term for the same idea.
- capitalization issue
- Capitalization issue is a broader term for turning profits into share capital, which can include a scrip issue.
Word family
- scrip noun
- A temporary document that can be exchanged for shares or money.
- rights issue noun
- An offer of new shares to existing shareholders, usually at a discount, but shareholders must pay for them.
Commonly confused: scrip issue or rights issue? scrip issue or share split?
scrip issue vs rights issue
A rights issue asks shareholders to buy new shares with their own money; a scrip issue gives them extra shares for free.
scrip issue vs share split
A share split divides existing shares into more shares, while a scrip issue creates new shares from company reserves.
Practice
In a scrip issue, shareholders receive new shares ______.
Choose one answer.
A scrip issue gives extra shares free of charge, usually in place of a cash dividend. The other options describe a rights issue or a sale, which are different.
Make it your own
Write a sentence using “scrip issue”, then check it and compare it with the examples above.