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Anthracite Capital, Inc. Message Board

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  • Leonardo_Bazzani Leonardo_Bazzani Jun 12, 2002 4:19 PM Flag

    BD I am confused....some say AHR

    If the stock yields 12% and trades @ $10.00

    In the next quarter if the dividend is $0.25 (25 U.S. cents). Stock will drop to $9.75 due to x � dividend. But that is a know factor.

    The stock should drop below $9.50. So in this quarter you suffer from drop more than yield.

    If stock remains @ 10.00 and you get $1.00 dividend only then the stock is yielding 12.00%
    If stock continues to drop, we can�t equate 12% yield and drop in the price of stock as two independent variables.

    How can I buy at $12.64 and lose more than yield, i.e. when price drops below 12.24.

    Leo

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    • Trend lines are working against you L.B. There appear to have been a few cases in which the stock dropped for a relatively short time, as you predict. But there are a LOT of factors working the other way.

      A lot of these MBS REITs have only dropped for an hour or two after ex-div. or similar, lately.