You own 2,000 shares of Patriot Corporation, which is about to raise
its dividend from $.75 to $1.00 per share. The share price is currently
$100. You would prefer that the dividend remain at its current level.
What would you do to offset the effects of the increase in the dividend?

Increase my intake of alcohol accordingly.

why would you want to offset an increase in dividend? Makes no sense. 
You could sell short the equivalent number of shares that is the
difference between the .75 to 1.00 (5 shares) and then you would owe
that dividend.

If trading costs were zero then the most sensible way to offset the
increase in the dividend is to use the extra $0.25 per share ($500 in
total) to by new shares in Patriot ($500 = 5 new shares). This way
your investment in Patriot increases and offsets the decline in their
net assets that results from the additional $0.25 they pay out.

Alternatively you may be able to elect to have some of your dividends
paid in scip. This is where Patriot give you newly issued shares
instead of cash dividends. The new shares they give you will be worth
the value of the cash dividends you would normally receive. This has
the same effect as the suggestion above of buying new shares but would
have the avantage of being genuinely costless. If this option is
available then you would want to get a quarter of you dividends paid
in scip.

I meant scrip not scip.

The simple answer is that you would sell off 500 of your 2000 shares,
thus retaining an amount that would yield the same $1,500 worth of
dividends

peguy97 doesn't know what he/she is talking about