GREY:ALXDF - Post by User
Comment by
Poriemonon May 31, 2016 2:55pm
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Post# 24920252
RE:RE:RE:its clear to me AZX has AE in the back pocket
RE:RE:RE:its clear to me AZX has AE in the back pocket Given that they're flow through shares they're being issued below market.
National FT shares:
Cost per share: $0.07
Tax savings on purchase of flow through shares at highest AB marginal tax rate: 0.07*0.48=$0.0336 per share
Net cost of purchase per share: $0.0364
If sell at prior market close of $0.06;
Proceeds per share: $0.06
tax burden on sale = $0.06 x 0.5 x 0.48 = 0.0144
Net proceeds on sale = $0.0456
Combined transaction:
Net proceeds on sale: $0.0456
Net cost of purchase per share: $0.0364
Net benefit to purchaser of share: $0.0092 per share
The above implies that assuming you are at the highest marginal tax rate in AB (the province I live in, was the only reason I picked that) that you can hold the shares to roughly $0.01 below the previously closing price of $0.06 and break even.
In other words, they were issued below market.