what to expect, page-8

The way to increase the size of the company & the share price is a finely managed operation.

If all franking credits are paid out each dividend period then what happens to the next dividend? If the market does not provide additional profits & franking profits over the previous period the dividend will be lower & consequently the share price will fall.

If some profits & franking credits are retained it makes the assurance of an increase in the following dividend more likely.

The way to run this business is to have a gradually increasing dividend stream on which investors can rely & this in turn will reduce the discount to nta.

Discounts to nta are only reduced when the history of a company indicates that better times are ahead with the distinct reallity of increased dividends.

A share buyback, while profitable for the company & helpful for the share price in the short term can be detrimental in the long term unless options granted by the company are exercised.

If Justin is able to successfully manage the introduction & exercising of more options then the share buyback will have been hughly successful. He will then have made money for the company in the buyback as well as increased the size of the company.

Justin is working for the benefit of shareholders not himself when you consider that the buyback limits the amount he would receive in management fees.