Talk:Scrip issue

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Stock Split?

is this the same as Stock split?

Other than possibly the term 'Scrip', I'm not seeing anything that's germane to the London Stock Exchange Cander0000 04:56, 23 August 2007 (UTC)[reply]

In a stock split the share holders don't invest more money in the company.

On the other hand in a scrip issue, the company is trying to raise money from its share holders.

I don't think the formula on the article page is very clear

It should be something like the following:

Let V[0] be the value of the company immediately before the scrip issue

V[x] be the value of the company after the scrip issue

S[0] share price immediately before

S[s] scrip issue price

S[x] post scrip issue price

N[0] initial number of shares

N[s] number of shares purchased in the scrip issue.

If V[0] is the initial value of the company

V[0] = N[0] * S[0] ( value of the company is the number of shares times the share price)

Value after scrip is value before plus amount raised:

V[x] = V[0] + N[s] * S[s] , (eqn 1)

But we know V[x] = ( N[0] + N[s] ) * S[x] i.e. the value after is the new price times the new number of shares

Now substituting into equation 1 the formulas for V[0] and V[x]

(N[0] + N[s]) * S[x] = N[0] * S[0] + N[s] * S[s]

Thus:

the post scrip price should be:

S[x] = ( N[0] * S[0] + N[s] * S[s]) / (N[0] + N[s])

i.e. (post scrip share price ) = {(pre-scrip market cap) + (total cash raised )} / ( post scrip total number of shares)

Samcol1492 (talk) 11:39, 21 April 2010 (UTC)[reply]

Scrip dividend definition

Provisional certificate issued (at the option of individual stock/shareholders) by a firm strapped for cash (but having adequate retained earnings) in lieu of cash dividend. It may take the form of (1) a promissory note discountable before its due date, also called liability dividend, or (2) common stock (ordinary shares) reflecting capitalization of a part of reserves (retained earnings). Also called capitalization issue, it allows the holders to increase the size of their shareholding without incurring associated costs, and the issuing firm to retain cash for expansion. —Preceding unsigned comment added by 41.217.220.7 (talk) 17:20, 22 July 2010 (UTC)[reply]

Scrip issue or Bonus issue Objectives

Main objectives of Scrip issue: 1: To increase the number of shares 2: To Reduce the share price 3: To Attract the shareholders by issue a bonus share instead of giving dividends, but the universally bonus shares are initiated to adjust the Share price. However Issuance of bonus share stimulates the demand of share which may cause a slight increase in share price. For example the ever highest price Of a company in a year is $500 current share price is $300 This gives an impression of low share price but in actual this is a sort of Trap for newbies, DO you know how? Yes there may be bonus shares issued by a company 1 for 2, it means the share price should be 500/2= $250 but the share price is $300!!! OH no the share price has not fallen in actual. so All that glitters are not gold. 4:Bonus share is also issued to give shareholders a "change of" existing shares. If you have one share of $1000 the bonus issue makes it 2 shares of worth 500 each it means You total wealth is same. — Preceding unsigned comment added by Waqaradil0089 (talk • contribs) 21:18, 1 August 2012 (UTC)[reply]