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Information about an issuer’s policy on scrip dividends is generally available on the issuer’s investor relations website. The issuer will require an instruction from the shareholder to confirm that they wish to receive their dividend in paper form. This could either be in the form of notification from the broker that this shareholder always opts for scrip dividends where they are available or a signed mandate from the investor that they wish this issuer’s dividends in particular to be paid as a scrip dividend.

The ex-dividend date, record date and payment date for the scrip dividend will normally be the same as for the cash dividend.

The scrip dividend is normally calculated by means of a scrip dividend reference price, a divisor applied to the cash dividend entitlement to work out how many shares the cash dividend equates to. The scrip dividend reference price is calculated according to a formula such as the average of the middle market quotations for the issuer’s shares on the five trading days commencing on the ex-dividend date.