Correct that the ratio is locked in (1WIC = 0.686 WAM). All...

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Myrkient

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08/04/22

16:43

Post #: 60747279
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Originally posted by peejay2: ↑

Thanks for responding. The ratio of conversion will be .686 WIC to WAM. The conversion date will be the 13 Apr… next Wed. Let’s say WIC goes up 1 1/2 cents, Then At the current conversion ratio, WIC will only benefit by approx 2/3 of that increase or by .686. If you sell now, you will get the extra 1.5 cent increase in the shares, but you will miss out on the 7.5% premium that WAM is paying. Obviously it’s not as simple as that because you must then take WAM shares to get that 7.5% premium (and you may not want WAM shares). So if you buy more WIC now, you will get more WAM shares, but, the VALUE of each share will NOT increase because it’s locked into the .686 ratio. I worked out that the current value of my WIC shares is just under $119k and when converted will go to approx $125K. But the conversion ratio will not change because the WIC SP has gone up or down in between now and next Wed, only if you purchase more shares before then. It may well be that someone wants to increase their holding in WAM via this method, but I can’t see any real substantial gain to be made. The real gain would be for WAM if the value of the WIC portfolio went up dramatically in between now and next Wed. Correct me if I’m wrong.

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Correct that the ratio is locked in (1WIC = 0.686 WAM). All green from your investment will rollover. Amount of shares and price you paid for the investment will adjust according to ratio on the trading platform you use. There isn't a lot of upside to buying WIC other than increasing a WAM shareholding. And in that instance it depends on what you paid for your original WAM holding. Example someone may have paid $2.30 a share for their original WAM holding. But they may buy WIC at $1.50 to increase their WAM holding as when you adjust $1.50 by the ratio they are effectively paying $2.18 for a WAM share which is cheaper than what they paid for their previous parcel of WAM shares. But they have to assume that WAM's price will be higher than $2.18 on Wednesday. All upside on buying WIC is assuming that WAM's SP is going to be more than 1.46 times higher than WIC SP on Wednesday. But it is very situational imho.

WIC Price at posting: $1.49 Sentiment: None Disclosure: Not Held
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