GREY:EBGUF - Post by User
Post by
TickerTwiton Jun 18, 2018 3:53pm
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Post# 28187942
Conversion Arithmetic
Conversion Arithmetic(1) One ENF share gets you a dividend of 2.2596 per year.
(2) One ENB share gets you a dividend of 2.6840 per year.
(3) On conversion your dividend becomes 0.7029*2.6840 = 1.8866 per year (83.5% of what you got from ENF).
(4) The loss in annual dividend is 2.2596-1.8866 = 0.3730, which at this moment is less than 1% of ENB's share price.
Even a small year-over-year capital gain, as little as 1%, gets you more than the loss in dividend. Most Canadians get a further gain due to the difference in tax rates (capital gain vs dividend).
When the dropdown halt becomes obvious, ENF might not see capital gains ever again once delinked from the conversion ratio.