PET 0.00% 2.5¢ phoslock environmental technologies limited

The fundamental reason for a dividend, or capital return, is for...

  1. 3,590 Posts.
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    The fundamental reason for a dividend, or capital return, is for the transfer of excess cash/profits from the company to its shareholders.

    The bonus share proposal does not involve any cash transactions and so in no way serves as an acceptable alternative.

    Let the company do an on market share buy back with its excess cash, shareholders will benefit in 2 ways:
    • support of the share price
    • less shares on issue, shareholders have an increased % holding in the company.
    There are no negative tax consequences, as shareholders who do not sell have no direct income or capital gains transactions.

    The bonus share exercise does nothing but create more work for my accountant and auditor!
 
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