OTCPK:MAUXF - Post by User
Comment by
parapooperon Nov 13, 2011 8:25am
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Post# 19233201
RE: Dividend
RE: DividendYour dividend vs. buyback argument does not make sense for me (and probably many others, depending on their tax situation)
Buying back 20% of shares increases the value of the remaining shares by 25%.
Paying out the same amount in dividends only gives me 20% minus 40-55% of that for taxes that I have to pay on dividends while my capital gains are tax free (I live in Switzerland).
So if I have $1000 invested in Mart a $200 buyback would give me a $250 gain and dividends would give me $110.
Another $200 buyback the next year would bring my gains to $660 vs $220 for dividends - 3x the gain and so on.
The only advantage of dividends is that you get the value guaranteed and immediately. But if I wanted to play it safe and needed my money right now I would not be investing in microcap nigerian oil-explorers in the first place.