Dividend 15 Split Corp T.DFN

NAV April 11

[AnEducator]

~$15.07. Premium: ~$0.42. We are still in payment territory.

[flamingogold]

A 42¢ premium for a 7¢ cushion is getting close to the spin of a slot machine.

[ABP123]

I stepped to the sidelines the other day at $5.54.  Started getting nervous.  Biden is at it again fighting the FED with his Direct To Consumer spending aka Student Loan Forgiveness.  Our fearless leader is also throwing the money around like confetti.  While I thought that the BOC was a lock for a cut in June based on the employment numbers, I am beginning to think US

[flamingogold]

At under 3% inflation, the BoC can afford to take their foot off the pedal with a 1/4 pt rate cut in June in order to avoid recession. The US economy, however, is running much hotter than us so cannot afford rate cuts before July. I believe if the FED can't cut by July 31, the market will have a cow as they will need to wait until after the election.

[mouserman]

looks like the market is having a cow already.. DFN under 15$ THRESHHOLD NOW.

[flamingogold]

Possibly, the market is pricing in a FED that will not cut in July either which means the economy will have to wait until after the US election for the next policy move. The FED will not cut in September as it will be viewed political in advance of the election.

[azzurri]

Point of clarification. If DFN Class A's closed at $5.53 on April 11 and the NAV is ~$15.07, doesn't that cause the premium to be ~$0.46? Just trying to make sure I understand.

[AnEducator]

The preferred shares have accrued ~$0.03 in dividends to date, so we need to account for that. It looks like I made a mistake in that the accrued dividends reduce the NAV of the capital shares, so the premium was actually higher by $0.03, not lower.  To clarify, if the NAV was currently  $15.00, the capital shares would be worth $4.97, not $5.00.