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A dividend recapitalization (often referred to as a dividend recap) in finance is a type of leveraged recapitalization in which a payment is made to shareholders. As opposed to a typical dividend which is paid regularly from the company's earnings, a dividend recapitalization occurs when a company raises debt —e.g. by issuing bonds to fund ...
Debt (in the form of bonds) has some advantages over equity as a way of raising money, since it can have tax benefits and can enforce a cash discipline. The reduction in equity also makes the firm less vulnerable to a hostile takeover. Leveraged recapitalizations can be used by public companies to increase earnings per share.
Qualified dividend status can save you a lot of money ... qualified dividends benefit from lower tax rates, known as capital gains tax rates, which can lead to savings on your overall taxes due.
The most common share repurchase method in the United States is the open-market stock repurchase, representing almost 95% of all repurchases. A firm will announce that it will repurchase some shares in the open market from time to time as market conditions dictate and maintains the option of deciding whether, when, and how much to repurchase.
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The after-tax drop in the share price (or capital gain/loss) should be equivalent to the after-tax dividend. For example, if the tax of capital gains T cg is 35%, and the tax on dividends T d is 15%, then a £1 dividend is equivalent to £0.85 of after-tax money. To get the same financial benefit from a, the after-tax capital loss value should ...
Extremely high yields can be dangerous to your portfolio. However, there is a sweet spot with proven winners yielding 6% to 8%. These companies offer that, and they increase the dividend every year.
The issuer is the entity (company or government) who borrows the money by issuing the bond, and is due to pay interest and repay capital in due course. The principal of a bond – also known as maturity value, face value, par value – is the amount that the issuer borrows which must be repaid to the lender. [2] The coupon (of a bond) is the ...