re: bhp buy-back clarification With such an ignorance of the rationale and potential benefits of such buy backs I would strongly recommend you father changes his financial adviser. (lol)
At the full 14% discount (which will be the final price) the buy back has differing benefits for investors with different tax situations.
Assuming a market price of $25.00, the buy back would be at $21.50.
For a super fund in the pension phase the return would be $2.10 capital, $19.40 full franked dividend AND $8.31 refund of franking credits (when the funds tax return is lodged), giving a total return of $29.81.
Tax paying investors would need to consider the value of the (potential) $19.40 capital loss to determine whether this would offset the lower-than-market sale price.
These type of buy backs are extremely popular - hence only about 15%-30% of shares tendered will be accepted.
bhp buy-back, page-6
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$40.77 |
Change
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Mkt cap ! $206.7B | |||
| Open | High | Low | Value | Volume |
| $40.70 | $40.90 | $40.45 | $537.7M | 13.19M |
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| No. | Vol. | Price($) |
|---|---|---|
| 1 | 50 | $40.76 |
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| Price($) | Vol. | No. |
|---|---|---|
| $40.78 | 8000 | 4 |
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