The amount AOD pays out is dependent upon their holdings paying the dividends to AOD as they did before the crises. AOD cannot, unless they desire to pay ROC, payout more than they receive. If 60% of the securities held by AOD keep paying their divvys and the recapture program "works" as before, then divvys remain the same. It isn't AOD who cuts us out of divvys. It is the securities held by AOD. I would speculate that maybe 10 to 20% of the securities held by AOD cut their divvys and 80% did not. If the 20% cut is 50% of prior divvys then expect a modest dividend decrease of 10%.
The below link t a Business Week article shows that more companies in the S&P 500 index increased their dividends from 2007. Most other companies held the same. A handfull of companies decreased dividends which was more than last year, but still only a handfull.
AOD could replace the issues in their portfolio which will cut dividends and easily find replacements which have or will increase their divvies.
If so, there would be no dividend reduction in 2009.
Exactly. Let's use INTC as an example -- Just because INTC's Stock price has gone from $24 to $13 in the last year is no reason to believe the'll cut their DIV. At a 56-cent DIV (on $1.25 EPS), they were yielding 2% last year, and now it's 4%. Plenty of companies would RAISE their DIV under these circumstances.
Your amount is pretty close to correct but you have to take the fact that AOD has fallen more than the market. They have huge portfolio turnover so their reinvestment opportunities will be more expensive for them than before resulting in less income. Now as I posted they have many options and strategies they can pursue to help out the dividend. we will just have to wait until dec 15 but I will jump for joy if it is 1.89 rather than 1.08. I think it will be. AWP is another question. I am scared of that one.