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dirty dividend tricks?
Bazn
Posts: 183 Forumite
hey,
it seems like Lloyds TSB is joining its peers in offering its dividend in shares rather than cash.
now this cash-saving strategy seems a bit of a con. after all they can't conjure something out of nothing right? so i thought about it and my calculations are as follows:
Say for example the dividend yield is 7%. so each shareholder gets the equivalent of 7% of their shareholding as new shares. sounds great as we all have more shares.
problem is that there are 7% more shares in total, so really we have gained nothing other than had our existing shareholding divided into slightly smaller units.
its an illusion! really they are abolishing the dividend but in a sneaky way so people don't notice...
it seems like Lloyds TSB is joining its peers in offering its dividend in shares rather than cash.
now this cash-saving strategy seems a bit of a con. after all they can't conjure something out of nothing right? so i thought about it and my calculations are as follows:
Say for example the dividend yield is 7%. so each shareholder gets the equivalent of 7% of their shareholding as new shares. sounds great as we all have more shares.
problem is that there are 7% more shares in total, so really we have gained nothing other than had our existing shareholding divided into slightly smaller units.
its an illusion! really they are abolishing the dividend but in a sneaky way so people don't notice...
0
Comments
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This is especially bad as Lloyds shares are going down like a stone because they agreed to take over that pile of rubbish HBOS. I wouldn't be suprised to see the two of them sinkKrusty & Phil Madoff, 1990 - 2007:
"Buy now because house prices only ever go UP, UP, UP."0 -
The dividend comes from the profits, therefore its not conjured out of nothing.
They wont be issuing of new shares, shares will be bought from the market.0 -
That's if there is any profits.
HBOS will probably finish Lloyds tooKrusty & Phil Madoff, 1990 - 2007:
"Buy now because house prices only ever go UP, UP, UP."0
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