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Thread: TLS Div Strip

  1. #1

    Default TLS Div Strip

    Just comparing a div strip with TLS and TLSCA! TLS is about $4.40 and TLSCA is about $3.00, if I had $20,000 to do it, I would obviously be better to buy the TLSCA's, considering they both get the 14 cent div. Am I missing something or is this a fact?

  2. #2

    Default Re: TLS Div Strip

    thats a fact.

    in reality, the only difference is the amount of capital required. since this is limited to $20k, you can buy:

    4545 shares of TLS giving divs of $636.30, with franking credits of $272.78


    6666 shares of TLSCA giving divs of $933.24, with franking credits of $399.89

    Thats an increase of 47%.

    Both are likely to fall 14c once ex-div, so I hope you realise that a div strip's goal is to receive FRANKING CREDITS and not cash divs, since the capital loss and cash div usually cancel out.

    While you are correct with TLSCA being the better deal, there are even better deals still. Look into instalment warrants and call options.

  3. #3
    Noskcid Noskcid's Avatar
    Join Date
    Feb 2007

    Default Re: TLS Div Strip

    Sorry, but whats franking credits??

  4. #4
    Last edited by RichKid; 25th-February-2007 at 10:04 PM. Reason: added quote

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