Dividend reinvestment schemes are a form of payout policy that can satisfy the desire of resident investors for the payment of the maximum possible franked dividends,while ensuring the company does not run short of cash to finance new investments.

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Dividend reinvestment schemes allow shareholders to automatically reinvest their dividends back into the company's stock, increasing their ownership in the company without receiving cash payouts. By doing so, resident investors can receive the benefit of franking credits on the maximum possible amount of dividends, while allowing the company to retain cash for future investments.

Dividend Reinvestment Schemes Are a Form of Payout Policy That