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Duke Energy Corporation Message Board

  • jtbigcat jtbigcat Aug 24, 2011 8:12 AM Flag

    Dividend after 1:3 split

    I am a DUK owner I understand the 1 for 3 split what happens to the DIV. X (3)??

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    • Right, so post-merger, PGN shareholders will effectively receive $3.00 x .87083 = $2.6125 per PGN as-if shares, representing a 5.3% increase. Not a windfall, but a gain nonetheless.

    • I own both DUK and PGN...and it is very apparent to me why DUK is proceeding with a 1/3 R/S.. Without the R/S DUK would have over 2 Billion Shares O/S once the Merger is completed!!...I personally have no problem with the R/S and understand why DUK is proceeding with it....read on...

      If you take notice, other Big UTEs Outstanding Shares Range in the 176 to 662 Million Share Area....

      [1] D = 569 M Shares O/S
      http://finance.yahoo.com/q/ks?s=D

      [2] NEE = 422 M Shares O/S http://finance.yahoo.com/q/ks?s=NEE

      [3] PEG = 505 M Shares O/S
      http://finance.yahoo.com/q/ks?s=PEG

      [4] ED = 292 M Shares O/S
      http://finance.yahoo.com/q/ks?s=ED

      [5] ETR = 176 M Shares O/S
      http://finance.yahoo.com/q/ks?s=ETR

      [6] EXC = 662 M Shares O/S
      http://finance.yahoo.com/q/ks?s=EXC

      What is a Reverse Stock Split:

      As part of the Duke Energy-Progress Energy merger, Duke’s board of directors approved a reverse stock split, and has now set the reverse stock split ratio at 1-for-3. Here’s a primer on how this would work.

      In a reverse stock split, a publicly traded company reduces the number of outstanding shares in proportion to the split ratio. Because the company will only be changing the number of outstanding shares, this should not change the company’s overall valuation. Assuming the company’s overall valuation does not change, the price per share should increase proportionally.

      See the table below, which illustrates the changes for Duke shares and dividends.

      A reverse stock split has no effect on a company’s operational performance. As a result, the company’s total market capitalization should not change solely because of the reverse stock split.
      Why do a reverse stock split?

      There are a number of reasons. For Duke, the reverse stock split is expected [ to bring the company’s stock price more in line with our peer companies ] and would reduce the number of shares outstanding.

      Currently, Duke has more than 1.3 billion outstanding shares. After the Duke/Progress merger closes, if there were no reverse stock split, the company would have to issue approximately 750 million additional shares, bringing the total to more than 2 billion shares, which is a very large amount.

      Doing a reverse stock split makes sense for the company so that the total number of outstanding shares is more manageable. By reducing the number of shares outstanding, the reverse stock split would also ensure that Duke will have enough shares authorized for issuance to Progress Energy shareholders in the merger.
      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.

      http://www.duke-energy.com/progress-energy-merger/faqs.asp

      ** Pay no attention to the Bashers and the Ill Informed who are trying to get you to Sell.You have alot of [ Traitors ] playing this Combo. LOL... There are alot of Synergies in this Merger and I`m Holding this Gem. **

      Hope this helps.

      Bill

    • parisonr@bellsouth.net parisonr Aug 24, 2011 6:32 PM Flag

      The information I received from DUK corpste with that questions is will go from $1.00 to $3.00. I have no problem with that!

    • I believe we sold high ruthless. Judging by the PAST 55 months since the split that created SE>>>this will not stay up here for long. RANGE BOUND !!

    • SOLD@$18.80. Still have 43% of my DUK shares in my ROTH acct so I can have regret on either side!! Have had DUK for 14 years. Great company,made good money>>>>>just do NOT like this reverse split. OUT

      • 1 Reply to wareham2620
      • 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.

        For example

        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

        Notes:

        •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

        http://www.duke-energy.com/progress-energy-merger/faqs.asp

 
DUK
73.06+0.45(+0.62%)Apr 24 4:01 PMEDT

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