Calculating SP after dividend payment - Aussie Stock Forums

# Thread: Calculating SP after dividend payment

1. ## Calculating SP after dividend payment

Say I have 10000 shares at \$4.90 and I get paid a 12c final dividend, does that mean the share price will decrease by roughly 12c after the payment has occured? Theoretically speaking (I know in the real world this doesn't happen).

I would just like a way of calculating roughly how much a price of a share will go down after the dividend is paid. Is there a formula for that?

Thanks

serp

2. ## Re: Calculating SP after dividend payment

Serp if there was a formula that could predict the price after going ex we would all be very rich, as you said a 12 cent divvy usually means a 12 cent decrease and I have found it is still the best rough guide, very few shares close down exactly what the dividend payout has been, and occasionally some shares have actually not dropped after going ex but have gone up.

3. ## Re: Calculating SP after dividend payment

This occurs on the Ex-Dividend date, not the dividend pay date. Generally speaking price drop reflects the dividend plus franking credit as a rough guide,although this is not always the case.

Perhaps check Rozella's thread on ex-div trading for more regarding dividends etc.

EDIT: brerwallabi beat me by a minute

4. ## Re: Calculating SP after dividend payment

I always allow a drop after exdiv of dividend + franking credit, it varies accordingly to market fluctuations. i.e if it bearish then it is closer to the div + fc, if it is bullish then it might drop much less than the dividend.

So to be on the safe side, because it affects my margin lending ratios, I allow for the worst....but it is really unknown exactly.

Examples of stocks that were exdiv today: XAO down 12.4, XJO down 16.92

MBL - div 90.0 + fc 34.71 = 124.71/share........drop today 158.0
NAB - div 83.0 + fc 28.46 = 111.46/share........drop today 69.0
RIN - div 14.0 + fc 3.60 = 17.60/share..........drop today 26.0

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