Hi Wei Keong,
Since you are already vested in the company, I assume you’ve done thorough homework and the company is sound to hold for the long-term. So now… You have the option to receive cash or scrip dividend. Which one to choose?
The answer depend on two things:
- Do you need the cash immediately for something else? If not, you have the option to add-on existing stake without incurring any brokerage charges. Otherwise, take the cash since you needed them.
- Is the company remain undervalued when scrip dividend announced at the stated price? If not, take the cash and redeploy the cash yourself. Otherwise, you can re-invest the money after considering your overall portfolio.
I hope my explanation is clear enough. If not, feel free to clarify with me :)