Dividend to Share Alternative (DSA)

Dividend to Share Alternative (DSA) Shape of thing to come if the Indian Company Law is amended, this gives an option to shareholders to accept shares of the company in lieu of cash dividends. The shares are offered at an average market price in whole numbers, fractional allotment being avoided by offering cash for the sum which falls short of the price of one share. The advantage to the company is that it can maintain cash outflow and retain the money for growth, while the advantage for the shareholder is that his invested capita grows and tax on current income is reduced. Capital gains in the future will attract capital gains tax, which is likely to continue to be lower than income tax rates. This alternative is an option, and a shareholder is entitled to receive the dividend in cash, should he so choose.

You can leave a response, or trackback from your own site.

Leave a Reply

You must be logged in to post a comment.

Powered by WordPress