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Originally Posted by lounger
Hello All,
This site is a godsend really love the commentary, hail Pumpin, Apache Avocado. learnt so much already. Please advise. I hear that you can gain the advantage of price appreciation and also be able to get dividends for those stocks sold if you sell at the right time. Is this true? If so please tell me how. Thx
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You are welcome Lounger!
Here is my little contibution to your question.
It is true that you can profit from both capital appreciation and dividend payment. It all depend on your objective of investment and the entry price. If you buy a stock x at N1 some weeks ago and over time, the price appreciated to N1.50 while you are still holding the stock the company whose stock you have, declare a dividend of 10k per share with a closure of register for Friday. In this case if you did not sell your stock before Friday, you will get the dividend declared less 10% tax. If you sell the stock by say Monday next week and the price of that stock after marked down for dividend payment of Friday appreciates to N1.45k then you will have gained 45k in price appreciation. I have omited the commissions for clarity. you will have to subtract your buy and sell commissions from your gross profit to obtain the net profit.
Prices of stock are always marked down (reduced by NSE) for dividend and bonus declared. Many investors are aware of this and it is considered when bidding to buy any equity.