Forum Archive Index - July 2002

["Rockbottom" <rockbottom@ihug.co.nz>]

My calculations are slightly different.

1.    On page 3 of annual report it states "The final dividend is 4.53 cents
per unit and has imputation credits attached of 0.158 cents per unit giving
a gross dividend of 4.688 cents per unit."

2.    Say the share price is now 97c, for comparative purposes we only need
to deduct the after tax dividend (This would vary depending on your tax
rate) but say net dividend of 3.5cents. This makes the after div value of
the shares 93.5c.

3.    The cost of the rights (7c) plus the new shares 82c makes 89c.

4.    Saving by buying the rights over the head share approx 4.5c.



Rockbottom





----- Original Message -----
From: "Peter Riches" <peter@kairos.ws>
To: <sharechat@sharechat.co.nz>
Sent: Friday, July 05, 2002 7:10 AM
Subject: [sharechat] Re: Kiwi Income Rights


> Thanks Malcolm. I had forgotten about the dividends. According to my maths
> the market price matches the theoretical price almost exactly when the
> dividends are considered:
>
> Approx. theoretical price ex 7.09 cent dividend = 96-7 = 89 cents
> Dilution effect = ((89*6)+82)/7 = 88 cents (= theoretical price ex rights
> and dividends)
>
> Subscription price + rights price = 82+6.5 = 88.5 (= current market price)
>
> Interesting to note that, according to the rights invesment statement, the
> net asset backing after the rights issue will be $1.05 per unit. This
means
> that at 88 cents KIP would be trading at more than a 16% discount  to NAB.
I
> believe this is more than twice the discount it was trading at before the
> rights issue was announced. Wonder how a 16% discount to NAB compares with
> other property shares? Seems quite a big discount for what seems to me to
be
> a quality share that is paying around 11% dividends per annum?
>
> Peter
>
>
> > Peter Remember it goes ex a very large dividend at the same time
>
>
> > >Greetings share-chatters
> > >
> > >Can anyone explain the maths involved in the current KIP rights issue:
> > >1 rights issue for every 6 units held
> > >Subscription price = 82 cents
> > >Rights are trading at about 6.5 cents
> > >Head share is trading at 96 cents
> > >
> > >Why are the rights trading at 6.5 cents - does this imply that the
market
> > >expects the ordinary unit price to drop to around 89 cents once the
> rights
> > >cease trading? Is this a premium or discount to the theoretical price?
> > >
> > >Thanks in advance
> > >
> > >Peter
> >
> >
> >
> >
> >
> >
> > _________________________________________________________________
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> >
> >
>
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