First, they returned 5c per share. So if you bought it at 50c and they return 5c per share, then they actually cost you 45c per share for tax purposes.
So if it was priced at 85c, it will drop to 80c per share (using numbers close to current market price)
Second, they reduced the number of shares by ~6.82% - here's the logic to get that number:
- Shareholders were given 0.9318 shares for every 1 share
- Put alternatively, they were given 9318 shares for every 10000 shares
- This means there were 682 shares reduced for every 10000 shares (6.82%)
Assuming we keep the same company value, the number of shares reduced by 6.82%, so the value of each share would increase by 6.82%.
Given this, if the share price dropped to 80c as part of the capital return, then we increase this by 6.82% to 85.46c per share.
In summary:
- The capital return dropped theoretically drops the share price by 5c, as 5c per share is returned to Shareholders
- There was a reduction of shares of 6.82%, hence the share price should rise by 6.82% if the company has not changed value
Hope this helps
SSM Price at posting:
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