scrip issue

= bonus issue; = capitalization issue; = free issue
The issue of new share certificates to existing shareholders to reflect the accumulation of profits in the reserves of a company's balance sheet. It is thus a process for converting money from the company's reserves into issued capital. The shareholders do not pay for the new shares and appear to be no better off. However, in a 1 for 3 scrip issue, say, the shareholders receive one new share for every three existing shares they own. This automatically reduces the price of the shares by 25%, catering to the preference of shareholders to hold lower-priced shares rather than heavy shares; it also encourages them to hope that the price will gradually climb to its former value, which will, of course, make them 25% better off. In the USA this is known as a stock split.

Accounting dictionary. 2014.

Look at other dictionaries:

  • scrip issue — noun A bonus issue (qv) • • • Main Entry: ↑scrip …   Useful english dictionary

  • scrip issue — See bonus issue. Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010 …   Law dictionary

  • Scrip issue — A scrip issue is a form of secondary issue. In the United Kingdom, public limited companies, those listed on the London Stock Exchange, have a number of ways to create new shares. A scrip issue is the process of creating new shares which are… …   Wikipedia

  • scrip issue — See bonus issue. Dresdner Kleinwort Wasserstein financial glossary (Also bonus issue / capitalisation issue) Euroclear Clearing and Settlement glossary Security holders are awarded additional assets free of payment from the issuer in proportion… …   Financial and business terms

  • scrip issue — bonus issue; capitalization issue; free issue The issue of new share certificates to existing shareholders to reflect the accumulation of profits in the reserves of a company s balance sheet. The shareholders do not pay for the new shares and… …   Big dictionary of business and management

  • scrip issue — (Also bonus issue / capitalisation issue) Security holders are awarded additional assets free of payment from the issuer in proportion to their holding. A bonus issue is typically represented by shares, rights or warrants. Nominal value does not… …   Euroclear glossary

  • scrip issue — / skrɪp ˌɪʃu:/ noun an issue of shares whereby a company transfers money from reserves to share capital and issues free extra shares to the shareholders (the value of the company remains the same, and the total market value of shareholders’… …   Dictionary of banking and finance

  • scrip issue — /ˈskrɪp ˌɪʃu/ (say skrip .ishooh) noun → bonus issue …   Australian English dictionary

  • scrip issue — (U.K.) Fin = stock split …   The ultimate business dictionary

  • Scrip — issued by the Capitol Hill Baby Sitting Co op, worth ½ hour of babysitting time. Scrip is an American term for any substitute for currency which is not legal tender and is often a form of credit. Scrips were created as company payment of… …   Wikipedia

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