Originally Posted by
macduffy
Hi bonne vie.
Don't take this necessarily as "gospel" but my understanding is that a company may issue shares in lieu of cash dividends provided it has established a dividend reinvestment plan and doesn't exceed any statutory or NZX limits on issuing shares without specific shareholder approval. It may be different for investment companies such as Kingfish where the dilution effect might be more readily apparent but in principle, any issue of equity is dilutionary - is that a word?
The point of holding Treasury stock is to avoid the hassle of cancelling shares and then having to (possibly) seek shareholder approval in the event of needing to re-create them.
Clarification and/or correction of the above would be welcome.
:)