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KembaraXtra- Financial Terms- accumulating shares refer to ordinary shares issued to shareholders instead of paying dividends in cash. This arrangement converts income into additional share ownership.
Under this system, the company typically deducts tax from the declared dividend in the normal way and then uses the remaining amount to purchase extra shares for the shareholder.
Accumulating shares allow investors to increase their holdings gradually without making additional direct investments using personal funds.
This method may help shareholders avoid income tax on cash dividends, although capital gains tax may still apply when the shares are eventually sold.
Accumulating shares are commonly used by investors seeking long-term capital growth rather than immediate income from dividend payments.
Under this system, the company typically deducts tax from the declared dividend in the normal way and then uses the remaining amount to purchase extra shares for the shareholder.
Accumulating shares allow investors to increase their holdings gradually without making additional direct investments using personal funds.
This method may help shareholders avoid income tax on cash dividends, although capital gains tax may still apply when the shares are eventually sold.
Accumulating shares are commonly used by investors seeking long-term capital growth rather than immediate income from dividend payments.
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