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REITs and rights issues: Dilutive or not?
By Create Wealth Through Long-Term Investing and Short-Term Trading  •  November 29, 2011
Assuming 1 for 2 nil paid rights issue at 10% discount at $0.90 and nil paid rights can be sold at $0.02 in the stock market to reduce holding costs and stock can be purchased at $1.EPS at $0.1 at 100% payout for DPS at $0.1 so the dividend yield at $1 purchase price = 10% ROC
Here is the Maths.
No point guessing or debating. See the Maths. See the truth for yourself.  Dilutive or not?
Investor A
Investor A has 10,000 shares but has decided not to subscribe for his entittled 5,000 nil paid rights issues. He then sold them at $0.02 and collected $100 as profit. After the sales of  his entitled 5,000nil paid rights, his invested capital for holding 10,000 shares has dropped to $9,900 as he used his $100 profit as cost reduction for holding 10,000 shares.
Investor B
Investor B has 10,000 ......
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By Create Wealth Through Long-Term Investing and Short-Term Trading
I am 62 yrs old uncle living in HDB heartland who has achieved financial independence @ 56 and finally retired @ 60 from full-time job as employee on 1 Oct 2016. Single household income since 1995 with three children. Eldest son and daughter are now working and youngest son still in his 3nd year Uni in SUTD. I have been doing long-term investing and short-term trading in Singapore stock market only since Jan 2000 so I am that Panda or Koala in the investment world; but I am still surviving well in the wild. I am now executing my Three Taps solution model to maintain sustainable retirement income for life till 2038. Cheers!
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