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Author: deadcat2 Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8147  
Subject: Re: CAPs Dividends Date: 4/14/2008 5:27 PM
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jstran, I think this particular FAQ has not been updated. If I recall correctly, it's been a bit over a year since CAPS began to reduce your original pick price to reflect dividend payouts.

From a post long ago, TMFEldrehad suggested this formula as the method to calculate the new cost basis: NB = (CP/OB)/(CP - Div), where NB = new basis, CP = closing price the day before the ex-div date, and OB = original basis.

I'm not sure if this was the precise formula that TMF settled on but if not, it's pretty close conceptually.

My question was related to being able to track those adjustments due to dividends being paid out. Unless you make a note of your original pick price, you'll not be able to track the difference between the original and adjusted basis.

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