Remember this is gross so has to be declared as income whether you take shares or cash (although it may include a tax credit).
So you are entitled to $30.
There are two types of re-investment schemes: SCRIP or DRIP.
Under a SCRIP scheme you would receive $30/$1.61=18 shares and also a cheque for the odd amount (63 cents)
Under a DRIP you get 18 shares and the residue is retianed by the company to be added to the next dividend (to buy more shares).
Some schemes have a small charge so you may not get 18 shares (read the small print!).
Basically it is a relatively cheap way of compunding your dividends.
The other point to remember is that the certificate for the dividend shares may take 4-6 weeks+ to arrive so if you wanted to sell your existing shares you would end up possibly with the odd 18 shares which could be expensive to sell on the market.
In cash, you do not get anything. You invested in a DRIP (Dividend ReInvestment Plan) which means the plan takes your dividends (the .03/share = $30 on 1,000 shares) and buys you more stock in the company. Since they are using the market price of $1.61/share, that $30 translate into a bit over 18 shares, so you now have 1,018 (plus a fraction) shares.
Hi, I've recently invested in shares in a company however i chose a direct investment plan instead of receiving cash.
Lets say i have 1000 shares and it pays a dividend of 0.03 but i have received a message as i have chosen the investment plan - "the market price to be used for the purpose of issuing shares under the Dividend Reinvestment Plan for the Final Dividend announced on 20 February 2014 and payable on 4 April 2014 is A$1.61 per share." what does that mean? how much will i get?
