Understanding Dividend Selection and Processing Time

Dividend selection allows shareholders of a listed company to choose between receiving dividends in shares or cash.

1. Dividend selection

When a company issues a scrip dividend, it distributes additional shares to its shareholders as dividends. Instead of raising capital from external investors, the company allocates these additional shares proportionally to existing shareholders based on their holdings, converting retained earnings or dividend funds into capital. This boosts the company's total equity, reduces cash outflows, and adjusts its capital structure on the balance sheet. By lowering the market price per share, it can also make the stock more appealing to smaller investors.

 Shareholders holding company shares as of the day before the ex-dividend date are eligible to participate in dividend selection.

2. processing time

To make a selection, shareholders should follow the timeframe set by the exchange and submit their selection through Longbridge App > Portfolio > More > Dividend Selection. Early in the selection window, the reinvestment price for some stocks may be displayed as "Pending" until the company announces it. The specific date for the reinvestment price depends on the company's official announcement schedule.

Disclosures

This article is for reference only and does not constitute any investment advice.