SCRIP

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SCRIP

Cardiology A clinical trial–Stanford Coronary Risk Intervention Project that studied the effect of intensive multiple risk factor reduction on M&M and prevention of new atherosclerotic lesions in Pts with moderate CAD. See Coronary artery disease.
McGraw-Hill Concise Dictionary of Modern Medicine. © 2002 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Column 2 reports the results of the cash-shortage hypothesis and shows that firms that issue scrip dividends have significantly higher debt-to-equity ratios and higher dividend yields.
(See Table 6.(16) The results, reported in Column 3 of Table 5 are consistent with the free-cash-flow hypothesis, as they indicate that firms with low-growth opportunities and net cash flow from operations are more likely to issue scrip dividends. Column 4 of Table 5 reports that large firms and those with lower investment opportunities, as measured by Tobin's q, are more likely to issue scrip dividends than smaller and growth firms.
There does not appear to be any statistically significant relation between the likelihood of issuing scrip dividends and the subsequent growth in earnings, dividends, and/or share prices.
This variable should be negative if the decision to use scrip dividends is motivated by the free-cash-flow paradigm.(18)
Column 2 shows that the dummy variable low CF x high q has a significant negative coefficient, suggesting that firms that are unlikely to have free-cash-flow problems do not issue scrip dividends.
The results imply that firms that are more likely to have free-cash-flow problems, i.e., those with higher cash flow and lower growth opportunities, are more likely to issue the scrip option, while those that need cash to finance their growth potentials (low CF x high q) are less likely to issue scrip dividends.
This implies that the payment of scrip dividends is not motivated by cash shortage.
In contrast to what is widely claimed, companies do not issue scrip dividends because of ACT recoverability problems.
The results also show that scrip dividends do got signal cash shortage and/or financial distress.
Furthermore, my results show that firms with higher cash flows and lower growth opportunities are more likely to issue the scrip option, while firms that need cash to finance their growth potential are less likely to issue scrip dividends. Thus, it seems possible that companies issue scrip dividends to invest the cash saved in non-positive-NPV projects.
One possible explanation for why companies pay scrip dividends could be that managers issue the scrip option for their own benefit, for example, to trade on insider information.