What does the reverse stock split mean for the dividend? It would work in much the same way as for the number of shares of stock. After a 1:3 reverse stock split, you would own one-third as many shares, but we expect the quarterly dividend per share would triple. This assumes Duke’s board maintains the dividend at its current level and adjusts it for the reverse stock split. In that case, the monetary value of your total dividend would not change.
The table below provides an illustrative example of the effect of a 1:3 reverse stock split, based on the assumptions described above.
Illustrative Example Number of shares owned Price per share Quarterly dividend earned per share Total value of your holdings Before a reverse stock split 300 $18 24.5 cents $5,400 value of shares $73.50 quarterly dividend Immediately after a reverse stock split 100 $54 73.5 cents $5,400 value of shares $73.50 quarterly dividend
•The reverse stock split would become effective if, and at the time, the merger is completed, at a ratio of 1:3, to be determined by Duke’s board of directors after consultation with Progress Energy. •The example presented in the table assumes for the reasons we have described that the reverse stock split does not change the company’s total market valuation and that Duke’s board of directors adjusts Duke’s current quarterly dividend