Subscribe to this topicForums > SL Capital Exchange Archive > Topic: JTIC : Dividend calculation Clarification
| Oct 19th 2007, 09:52 Turmith Flamand |
Dividend calculation Clarification | |
| I've been trying to figure out why people are selling JTIC shares at such a discount. It seems insane to me to be accepting only 7% profit from selling shares right away when the profit potential is much higher. Assuming someone purchases 10,000 shares of JTIC. Would the interest earned(previously said to be .2% daily) compound daily for the entire month until the dividend was paid out? Or will it be a flat .2% per day for the entire month? The difference on 10,000 shares is only 17L every 30 days But for larger amounts over 6 months it would be significant. Thanks, Turmith Flamand |
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| Oct 19th 2007, 11:26 Arbitrage Wise |
Re: Dividend calculation Clarification | |
| It will be .2% compounded daily, with the interest paid out on the 1st day of the month. The monthly dividends will not earn any interest since they will be paid out, so in order to get those profits compounded, you'll have to reinvest the profits. | ||
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| Oct 19th 2007, 15:21 Guardian Market |
Re: Dividend calculation Clarification | |
| I'd like to post some calculations here, and Arb, if you'd like to comment that would be beautiful. Theoretical investment of L$10,000: Cash Flows 10/8/2007: (L$10,000) (@IPO) 10/9 - 10/31: 10000*[(1.002)^23 - 1] = L$470.26 11/1 - 11/30: 10000*[(1.002)^30 - 1] = L$617.73 12/1 - 12/31: 10000*[(1.002)^31 - 1]= L$638.96 1/1 - 1/31: 10000*[(1.002)^31 - 1] = L$638.96 2/1 - 2/29: 10000*[(1.002)^29 - 1] = L$596.53 3/1 - 3/31: 10000*[(1.002)^31 - 1] = L$638.96 4/1 - 4/30: 10000*[(1.002)^31 - 1] = L$617.73 5/1 (or sometime after): L$10,000 Total Investment: L$10,000 Total Return: $14,219.14 Percentage Gain: 42.1914% Days: 205 APR: (1.421914)^(365/205) - 1 = 87.1497% Note that this does not discount the cash flows, so it's not complete a present value calculation. If I use a 0.1% per day discount rate, the rate of return turns out to be 20.83%, with an APR of 40.07%. Arb, any comments on these numbers? If correct, I think they could be used as a reference for investors. |
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| Oct 19th 2007, 16:37 Arbitrage Wise |
Re: Dividend calculation Clarification | |
| Guardian - I believe those numbers are accurate, except that the gains start accruing in November, so you have to take out this line: 10/9 - 10/31: 10000*[(1.002)^23 - 1] = L$470.26 | ||
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| Oct 19th 2007, 17:05 Guardian Market |
Re: Dividend calculation Clarification | |
| Well, due to the lack of an edit button, I can't take it out...however, I'll post the revision here :-) Theoretical investment of L$10,000: Cash Flows 10/8/2007: (L$10,000) (@IPO) 11/1 - 11/30: 10000*[(1.002)^30 - 1] = L$617.73 12/1 - 12/31: 10000*[(1.002)^31 - 1]= L$638.96 1/1 - 1/31: 10000*[(1.002)^31 - 1] = L$638.96 2/1 - 2/29: 10000*[(1.002)^29 - 1] = L$596.53 3/1 - 3/31: 10000*[(1.002)^31 - 1] = L$638.96 4/1 - 4/30: 10000*[(1.002)^31 - 1] = L$617.73 5/1 (or sometime after): L$10,000 Total Investment: L$10,000 Total Return: $13,748.88 Percentage Gain: 37.4888% Days: 205 APR: (1.374888)^(365/205) - 1 = 76.272% Note that this does not discount the cash flows, so it's not complete a present value calculation. If I use a 0.1% per day discount rate, the rate of return turns out to be 17.13%, with an APR of 32.51%. |
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| Oct 25th 2007, 13:56 iVentures Volitant |
Re: Dividend calculation Clarification | |
| Certain investors may decide to sell their positions earlier at a discounted rate based several factors. First can be quick profit. In the first week, I purchased about 50K positions at 1$L. Selling about 25K positions in 5K lots, between pricing at 1.08-1.15. Quick profit for the short term, then repurchased 25K positions back at an average price of 1.04. Another factor may be another investment opportunity, if they believe they can generat more than 6%/month up until the maturity date. | ||
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