meduim term outlook for divvies, page-5

Operating earnings will only go up slightly as a result of lower interest payments and better ratings from the agency-liars.

However, roughly the same amount of operating earnings will now be spread across double the shares - so consider (using round numbers):

Assume entry @ 0.70c / share...

a. $500m to distribute over 5 billion shares = 10c / share, shares cost 0.70c each, so the yield = 10/70 = about 14%

b. $500m to distribute over 10 billion shares = 5c / share, shares cost (0.70+0.35)/2 = 52.5c and 5/52.5 = about 10% ...

The yield is lower due to the much higher denominator in the number of shares, and the constant numerator, being the operating earnings, which is only minimally impacted (through lower interest rates).