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Subject: How to compute maximal payout per share rss

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Adam Badura
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I already asked How to compute maximal price. And now it's time to ask the same about maximal payout per share. What is the formula?
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Björn “Beorn” Rabenstein
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That's easy: shareprice/3, always round down.
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Adam Badura
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Ursus Corvus Lapis wrote:
That's easy: shareprice/3, always round down.


Yes. I noticed that later as well. But I was in a hurry and about to leave and decided to ask sooner hopping (properly) to get an answer at the time I'm back.

Any "history" and rationale about it?
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Björn “Beorn” Rabenstein
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adambadura wrote:
Any "history" and rationale about it?


Nothing too fancy. Obviously, the dividends should be limited to prevent spoiler strategies where a $6 shares suddenly pays $25 dividends or something. Making the max dividend dependent on the share price is also another incentive to have a high share price (which might otherwise be very weak if the only share you have is the unsellable last share...). The "about one third at most" is related to the typical yield of a private company, which is "about on third" too, at least for the synergy-poor ones.

Historically, the limit was 20% of the share price, but at that time, the typical yield of a private was lower, too. So there's indeed a connection...
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