Question

3. Many companies on the Bursa Malaysia encourage shareholders to participate in the Dividend Reinvestment Plan. The plan should be exercised with caution.

Explain the consequences of a badly executed Dividend Reinvestment Plan especially in this post Covid-19 economic scenario.

Answer 1

The payment of dividend is not important thing to the company. Whenever the company get profit I have to pay. The covid-19 synereo is make every company in loos. So the investers who reinvest there dividend will not get that much money comparing two previous year. In the the perspectives of community the reinvestment will help to get more money. The company also Raise money by taking loans for issuing debentures. But safe is to make there shareholders reinvestment. The payment of debenture interest and loan interest is mandatory. So best option in front of the company is to make there shareholders again reinvestment.