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Hi Martin,
I do a calculation. Please correct me if I am wrong
5 years 2% per annum = 10% of $1.07 = $0.11
A special distribution = roughly $0.30 ?
The cost of getting a PCCS = $0.66
in order to convert to Tiger airways shares, need to pay $0.65
means the cost of buying a tiger airways share is $1.31?
What is the benefit of subscribing a PCCS compare to buy a share from stock market?
ReplyDear Calvin,
you got the conversion formula wrong. The distribution is independent from the conversion.
If the conversion price is set at $0.66, you will be given 1070/0.66 = 1621 shares when you convert the PCCS into shares.
Also, I don’t think the special distribution will be anywhere near $0.30. That is too optimistic a figure.
ReplyDear GS,
the 2% dividend is not much. The question is whether you think there is upside to Tiger shares, then the convertibility might be useful.
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