I, like you, hold a large amount of FMG shares purely for the...

I, like you, hold a large amount of FMG shares purely for the dividend and do not really fret to much over the SP. As I understand it the Board decide what percentage of profits they will return to share holders. I believe the Board weigh up future investments and expenditure they will need to make and come up with a dividend per share, as a percentage of profits, they willl pay to share holders. This is paid twice a year. In the 4-5 years I've held FMG its SP does seem to follow a pretty cyclical pattern. Rises as the ex-divi date approaches as people buy for the divis and falls after the ex-divi date as those who have secured the divi sell the shares and move on. Obviously the SP also reacts to the iron ore price as well. There has been a lot of pessamistic comments about the IO price but, as has been pointed out several times, it is above what it was this time last year so I'm hopeful for a divi of $1+ and a yearly total divi of $1.70+. Looking at some reputable sites like CommSec and Motley Fool they are predicting divis will fall over the next 2-3 years paying a full divi of around $1.49 and then $1.03, so I've factored those figures into my budgeting but hope they are being a little pessamistic. I'd also be interested in others thoughts on future dividends.