I'm having trouble getting my head around this "equity for divi"...

I'm having trouble getting my head around this "equity for divi" deal... how can it be worth anything if EVERY shareholder receives an equal number of new shares? In theory the share price will drop by exactly the same % as the new shares on issue so you have a net gain of zero right?

If this is correct then you're not actually distributing the income as a trust should, you're just paying off holders with worthless extra paper?