-=> Quoting Andrew Freeman to All <=-


 AF> I note that there is no material in the agenda for the 1994 AGM
 AF> about Boral's decision to suspend its Dividend Re-investment Plan
 AF> and Dividend Bonus Plan schemes. I disagree strongly with this
 AF> suspension decision. As Bruce Bond has pointed out in The Age,

Hi Andrew.  I am against DRPs and have written elsewhere on the subject.
Firstly, every shareholder has to participate, or suffer dividend
dilution, especially with the high takeup of some DRPs.  Secondly, DRPs
encourage automatic, mindless investing.  Every investment, including
dividend income, should be considered on its merits.  Reinvesting in a
particular company may not be the appropriate choice at the time.
Thirdly, DRPs create odd lots for small shareholders which may have to be
sold at a significant
discount to the market and offset the original discount.  Fourthly, some
institutions use the DRPs improperly to "strip" dividends and make rapid
short term gains.

I am personally happy to see that many companies are curtailing their
DRPs now that their balance sheets are in order.  Bear in mind that most
funds raised via DRPs have gone to retire debt - not increase earnings. 
Therefore the
same amount of earnings must be spread over more shares and future
dividends suffer (hope this makes sense).  The appropriate way to
reward shareholders is via bonus issues or special dividends.  These
treat all shareholders fairly, unlike DRPs.

Rgds

Bob

--- Blue Wave/Max v2.12 [NR]