Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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Based on 2% dividend yield the management can replace this with a 1:50 or 1:25 bonus share issue Incase they needed capital! Mark 12:29
Deuteronomy 4:16
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Rank: Chief Joined: 1/3/2007 Posts: 18,124 Location: Nairobi
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guru267 wrote:VituVingiSana wrote:guru267 wrote:VituVingiSana wrote:guru267 wrote:BAT will only issue bonus shares if it needs to preserve profits for investment purposes!
With regards to a share split... I don't see that happening any time soon! I mean google shares trade well over $1,000 with no split in sight.. How does a bonus preserve profits for investment purposes? If the company needs to start retaining earnings for investment purposes they may issue bonus shares in lieu of cash dividends to keep shareholders happy! Jubilee, Centum have adopted this strategy in the past! Isn't it easier to NOT pay a dividend then spend the effort, time & cost to issue bonuses? And give me numbers for BAT. What is the criteria used? If the dividend is Shsh 30 [2% Dividend Yield] so is the Bonus based on Par Value or on Current Price? Berkshire Hathaway doesn't give bonuses nor dividends. Please explain. When shareholders are used to something you do not take it away unless you do not care about the share price! I was merely pointing out that if BAT needed capital then they could replace the cash dividend with a bonus like plenty of companies have done in the past to keep shareholders happy! Warren Buffet might be an astute investor but his method has never been the only method of doing things! So there is no reason to issue a Bonus but for PR purposes. The cake remains the same size. The shareholder still gets the same portion albeit more slices. And that is what Warren Buffett maintains as a reason not to go down that path... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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