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Dividend stripping is the practice of buying shares a short period before a dividend is declared, called cum-dividend, and then selling them when they go ex-dividend, when the previous owner is entitled to the dividend. On the day the company trades ex-dividend, theoretically the share price drops by the amount of the dividend.
If the investor buys before the ex-dividend date, and sells on the ex-dividend date or after, the investor will receive the dividend payment. More precisely, the owner at the close of trading on the record date receives the dividend, since shares may be traded frequently and have a series of owners on any given single day.
The after-tax drop in the share price (or capital gain/loss) should be equivalent to the after-tax dividend. For example, if the tax of capital gains T cg is 35%, and the tax on dividends T d is 15%, then a £1 dividend is equivalent to £0.85 of after-tax money. To get the same financial benefit from a, the after-tax capital loss value should ...
Image source: Getty Images. 1. Lockheed Martin. After its stock price reached an all-time high earlier this year, Lockheed Martin and its defense contractor peers have sold off considerably over ...
In this article, we discuss 11 best Canadian dividend stocks to buy now. You can skip our detailed analysis of Canadian dividend stocks and their performance and go directly to read 5 Best ...
Dividend stocks are generally tied to mature, stable companies with significant, predictable cash flows. This makes dividend stocks a good bet for the long term for more conservative investors, as
The return on equity (ROE) is a measure of the profitability of a business in relation to its equity; [1] where: . ROE = Net Income / Average Shareholders' Equity [1] Thus, ROE is equal to a fiscal year's net income (after preferred stock dividends, before common stock dividends), divided by total equity (excluding preferred shares), expressed as a percentage.
The following video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Brendan Byrnes and consumer goods editor and analyst Austin Smith discuss topics across ...