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Alliancebernstein Income Fund Message Board

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  • flipper_58 flipper_58 Nov 25, 2001 9:19 PM Flag

    Question for ACG stock dividend

    Buying the stock to "capture" the dividend has no basis. If a dividend is declared of $.10, ex-dividend day the stock price is REDUCED by the NYSE by the amount of the what's the purpose of chasing them just before ex date?

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    • it is just that: another issue. My procedure clarification was in response to a poster who seemed to be asking "by when do I have to buy a stock to collect the dividend?" You seem to be addressing the wisdom or timing of such a purchase for the reason you stated. The answer to that poster is very simple; To collect the dividend buy the stock the business day before it goes x-dividend.

    • flipper_58 - You are correct that buying the stock to capture the dividend is not a good idea which is what I meant about not recommending this strategy. However, I don't think the NYSE itself actually reduces the stocks price by the dividend amount. It is the market itself that does it and it is often hidden in the normal market movement of the stock.

      • 1 Reply to teclark
      • ""I don't think the NYSE itself actually reduces the stocks price by the dividend amount""
        Yes it does. This is done prior to the open then other orders effect the opening too. You can check with the fund but I've worked in this field for 20 years and know this to be true.

        Also the rights offering has NOT been priced. It's going to be a 5% discount of the average of the last 4 closing trades.
        ""The subscription price will be calculated as 95% of the lower of (1) the average of the last reported sales price of a share of the Fund's common stock on the NYSE on the expiration date and on the previous four business days, and (2) the net asset value per share as of the close of business on the expiration date""

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