Dear member, our 46th Annual General meeting will be held on 25th February 2023Learn More
1 . Compounding effect in action – Due to the automatic reinvestment of cash dividends & rebates, this helps investors achieve compounding returns in the future. Reinvestment leads to compounding, which grows the investment faster. For example, consider an investor that receives a cash dividend & rebates and reinvests the cash dividends for additional shares. During the next dividend payout, the investor will receive more cash dividends due to the additional shares purchased through the plough back.
2. Capital creation for the Sacco – Dividends & rebates plough back helps the Sacco accumulate more capital which makes it more stable and liquid. The Sacco is able to finance its operations and will not source for external financiers to fund its operations. This helps to avoid the finance costs associated with external borrowing. “Share Capital is the cheapest source of finance for any company”
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