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$DBS Group Holdings (D05.SG)$ isn’t this bonus share equival...

$DBS Group Holdings(D05.SG)$ isn’t this bonus share equivalent to a stock split?
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  • Yalole : Yes it is

  • InhumaneOP Yalole: then what’s with the increase in share price lol people see number increase means happy

  • Yalole InhumaneOP: Because it increases shareholder's value over time, especially for those holding long term. Withe the additional 1 share, assuming you hold the stock, you will get 10% more dividends in the future due to the fact that you have 11 shares for every 10 shares you hold now. On top of that, DBS has signalled future dividends at 2.16 per year. Compounded with the stock split, it is equivalent to 2.37 dividends in the future if you hold.

  • InhumaneOP Yalole: my point being it doesn’t matter if you split the dividend 10 ways or 11 ways the underlying dividend is still the same. Granted the dividend is probably higher than what people expected so it rose a bit.

  • Yalole InhumaneOP: You don't get it. I'm referring to future dividend, not the current Q4'23 dividend. Holding DBS now gives higher future returns than if you were to buy in after the stock split due to the additional share you hold after the split.

  • InhumaneOP Yalole: yup but even if you buy in after the stock split, the number of shares you can buy would more or less be the same as the stock price would drop by that amount from the stock split. Dividend remains the same even with this additional 1 share.

  • 101715479 Yalole: true..bonus shares better than dividend.

  • Deep Sea : Nope. Different.

  • Yalole InhumaneOP: Dividend is higher with the 1 additional share. Yes, the price in effect will drop due to the share split, but with a 2.16 dividend which is higher than 1.94 in 2023, would people be willing to sell the shares after split at 10/11 of current price?

  • Captain Woon : 1 to 10 in a way lower the liquadity of the stock as most people do not own a lot of DBS with the price over $30 so these fractional shares are unlikely to sell for most retail shareholders in particular long term holders.

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