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Choice Dividend Delivery

Choice dividend delivery refers to the method by which shareholders receive their selected form of dividend, whether as cash or additional shares, after choosing between the two options in a choice dividend scheme. Companies usually allow shareholders to select their preferred form of dividend in advance, and the choice is executed on the dividend payment date. The delivery process ensures that shareholders receive either a cash payout or the newly issued shares in their brokerage account.

Example

A shareholder selects to receive stock instead of cash as part of a choice dividend. On the dividend payment date, the additional shares are credited to the shareholder’s brokerage account.

Key points

• Choice dividend delivery is how shareholders receive their preferred form of dividend (cash or stock).

• Shareholders must indicate their preference before the dividend payment date.

• The selected dividend is then delivered either as a cash payment or additional shares.

Quick Answers to Curious Questions

Depending on their selection, shareholders receive either a cash payment in their bank account or additional shares deposited into their brokerage account.

Shareholders typically select their preference before the dividend payment date, with the company providing instructions on how to make the choice.

If no choice is made, the company may default to a specific form of dividend (usually cash), or issue dividends in the form that was last selected.