DRP Figures

Quick one for the experienced with DRP
Say dividend is $10 and share price is $8, what happens to the difference? Is it paid to you as a dividend or carried forward to the next dividend?
Thank you

 

Yep, I'm still reading, folks.

It depends @Tony. Some like ARG round up to the nearest whole share and others carry forward. Best to read the terms and conditions relating to each company's DRP which is available from their website.

Bed time.

 

Thank you

 

Just to clarify how I understand it arg round up or down to the nearest whole share? So in the example the extra $2 would be rounded down, but if the left over was $4 or more it would be rounded up to the $8 share. I could be totally off with this but as I read it recently as had the same question and that was my interpretation of it.
I think companies like cba leave the left over in a drp account and put it towards the next drp. I have been wrong before and this time may be no different

 

CBA work it out that way,and so do most of the other banks..

 

Depends on the company, some may even issue partial shares.
Eg. For your example, some companies may issue 1.25 shares.

 

Yeah, probably didn't make it clear. You're correct some use rounding rules whereas others carry forward the balance to the next dividend.

If you are in a DRP and cancel it, most companies keep the residue but I understand some, such as WES and WBC, pay it out down track to your nominated bank account.

I don't know of any LICs which provide fractional shares under its DRP but managed funds probably do.

Brekkie time for me. Keep working dudes as someone has to in order to keep me in the lifestyle to which I have become accustomed.

 

Just send me a big thank you when you get your fat juicy check while kicking back on the beach at Vanuatu, it will be issued from my blood, sweat and tears of hard labour hehe

 

Vanuatu No. Cinque Terre, Volterra, Arezzo and various other places, Yes.

Watching and reading the franking crap with interest too.

 

Spend it while you can before Shorten takes it away from you.

Hope you’re having a great time. Can you send some sunshine and fine weather our way? We’ve barely seen blue skies and fine weather in well over a month here.

 

Whether you owned 1 share or 5000 shares, the rounding happens on the total dividend so you will still only miss/gain 1 share.

 

Yep obviously it’s the last share not every one of them