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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.
Asset stripping refers to selling off a company's assets to improve returns for equity investors, often a financial investor, a "corporate raider", who takes over another company and then auctions off the acquired company's assets. [1] The term is generally used in a pejorative sense as such activity is not considered helpful to the company.
Slutzkin v Federal Commissioner of Taxation, [1] was a High Court of Australia case concerning the tax position of company owners who sold to a dividend stripping operation. The Australian Taxation Office (ATO) claimed the proceeds should be treated as dividends, but the Court held they were a capital sum like an ordinary investment asset sale.
A dividend stock is just a publicly traded company that pays a dividend, while a dividend-focused mutual fund or ETF is a basket of many dividend-paying stocks.
Dividends are a portion of a company’s profits issued to shareholders. They are typically paid quarterly. As they represent a share of the income of the company, dividends are taxable to ...
This page was last edited on 23 December 2005, at 21:44 (UTC).; Text is available under the Creative Commons Attribution-ShareAlike 4.0 License; additional terms may apply.
Ex-dividend date: Starting this day, shareholders who purchase the stock will no longer receive the next dividend payment. Payment date: On this day, investors will receive the dividend payment.
A takeover offer so attractive that the target company can not refuse. Usually this type of takeovers result in a change of the management team. Shareholders too, sometimes have reasons to assume that the takeover will serve some ulterior motive of the predator (such as asset stripping, transfer of reserves) rather than uphold their interest. A ...