I was thinking even more about dividend capture strategy recently.
Lets say AMP share price = 1.50 before dividend, 1.40 after Ex div (so loss of 10c, equal to value of dividend)
If I sell, the dividend itself gets eaten up my drop in price
BUT I get franking credits = 1/0.7*10 - 10 = ~4.2cps
AND I get to log a capital loss of 10c -> Over the long term I will be able to regain 1.5c of this via using it to reduce my capital gains in the future (or 3c if I suddenly wake up tomorrow and begin to start short term trading)
As such even if the price drops equal to the dividend I still capture 5.7cps (or 7.2cps, if i begin short term trading).
Thoughts? Or would we expect the price to drop by 14.2c on ex div (equal to the value of the grossed up dividend)
Ovbs this is a bit of a tangent to AMP discussion at hand, sorry for derailing!
Ann: Dividend/Distribution - AMP, page-95
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