Dividends in kind The Board may resolve to pay a dividend in cash or satisfy it by distribution of specific assets (including shares or securities of any other corporation), the issue of shares or the grant of options. If the Board satisfies a dividend by distribution of assets, the Board may: (a) fix the value of any asset distributed; (b) make cash payments to members on the basis of the value fixed so as to adjust the rights of members between themselves; and (c) vest an asset in trustee.
CORPORATIONS ACT 2001 - SECT 254UOther provisions about paying dividends (replaceable rule--see section 135) (1) The directors may determine that a dividend is payable and fix: (a) the amount; and (b) the time for payment; and (c) the method of payment.The methods of payment may include the payment of cash, the issue of shares, the grant of options and the transfer of assets.
Regarding your statement about paying a dividend by issuing shares rather than cash, I would think the total value of the company does not change but there are more shares issued, therefore the market is likely to react by marking down the value of the share. Just my opinion.
PGC Price at posting:
51.0¢ Sentiment: Hold Disclosure: Held
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