RE:RE:RE:RE:RE:S/P would be $3.00 to get 6% dividendAh ok. I think the interest can still be written off even if it's just owning in anticipation of receiving a dividend in the future so the rules of that are pretty loose. Not totally sure though. Either way I think a cut to half would have at least kept income investors somewhat interested. As it stands the dividend is basically a joke now.
BSdetector2016 wrote: No; that came out sideways. If it is in a margin account you can claim the interest cost to own it as a carrying charge if it pays a dividend.
nedstar71 wrote: A stock has to pay a dividend to be marginable? Why is this the first time I've ever heard this?
BSdetector2016 wrote: Keeping the dividend allows it to remain marginable. The cut won't remain in place forever if the company can stabilize itself.
nedstar71 wrote: To be fair this won't be valued by the yield moving forward. To me the size of the cut was stupid. They should have either cut it in half or cut it completely. Cutting it in half you could still maintain a 5-6% yield at the current price which would be ok for some income investors. But as it stands no income investor would stick around for 2-3% yield in this subpar company, so they may as well have cut it completely if the true intention is to apply that money to buybacks and go balls to the wall with that.
While of course this is no way comparable to a reit, TNT.un completely suspended their distribution a year ago in favour of buybacks. Combined with a share price decimation leading up to that period and a share consolidation the share price is actually up about 60% off the lows it hit since the distribution cut and share buybacks were announce and implemented.