Post by
tylerreddick on Jun 17, 2024 7:59am
Buy CWB.PR.B
CWB will redeem the preferred shares at par, $25 per share.
So buying them today will give an 8% capital gain in a few months, plus whatever dividends are paid out until then.
Not a bad return for a totally risk-free investment.
Comment by
Puma1back on Jun 17, 2024 9:22am
has that detail been confirmed in the details of the purchase agreement? If so, that is a neat idea! caution though, should the actual issuer (CWB) redeem the shares you need to sell them the day before otherwise the proceeds would be treated as a taxable $25 dividend per share with the taxes rolling off that type of income.
Comment by
tylerreddick on Jun 17, 2024 9:32am
Not sure you are correct on the payment being a dividend. If they are redeemed, that would be a capital gain.
Comment by
tylerreddick on Jun 17, 2024 9:34am
But no, the details won't be out before they issue the management information circular on the deal. The only risk is that the deal doesn't go through, and buyers would be "stuck" with a 6.9% tax-advantaged yield on the preferred.
Comment by
tylerreddick on Jun 17, 2024 2:13pm
The capital gain would be almost $2, with another $1.20 in dividends, for a total gain of over 13% in 6 months, 26%/annum. There really aren't too many risk-free investments out there with that level of return