Replication Data for: Elective Stock and Scrip Dividend

We investigate firms’ decisions to pay elective stock dividends, known in
the UK as scrip dividends. Scrip dividends give investors the choice
between receiving new shares or the equivalent value as a cash dividend.
UK firms paying scrip dividends are more likely to be financially
constrained, and scrip dividends are used more when access to external
financing is costly. Our results are robust to using the 2008 financial crisis
as an exogenous shock to credit supply. Cash preservation is the most
important corporate incentive to use scrip dividends as they tend to be
distributed in combination with dividend cuts and with major corporate
investments such as debt-financed mergers and acquisitions. Analysis of
US dividend reinvestment plans by which investors purchase new shares
confirms firms’ cash-preservation motives