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No. of Recommendations: 1
Hello Fools,

You will perhaps recall the adjustment methodology for dividends for these BDC's where the dividend, the growing dividend, and the presumed reinvestment of those dividends, is essentially the thesis at play.

Here's the past discussions of this topic:

"What we are doing is an isolated form of time-weighted return here. This means that we are virtually reinvesting the dividend received (as of the ex-dividend date), into AINV at the opening price the morning after the stock goes ex-dividend. We first calculate a multiplier for our cost basis to reflect the dividend received and reinvested, and then calculate a dividend-adjusted cost price."

And here's the math behind all of this:


Recommendation Date: 11-Feb-08

Ex-Dividend Next-Day
Dates Open Price
18-Mar-08 $16.01
17-Jun-08 $16.47
16-Sep-08 $16.21
16-Dec-08 $ 8.47

With First Dividend:
Multiplier of Original Price = 1 /(1 + (Dividend / Ex-Div Price)

With Subsequent Dividends:
Multiplier of Original Price = Previous Multipler /(1 + (Dividend / Ex-Div Price)

Net Result Today:
Ex-Dividend Next-Day Multiplier of Scorecard
Date Dividend Open Price Original Price Stock Price
11-Feb-08 1.000000 $14.88
18-Mar-08 $0.52 $16.01 0.968542 $14.41
17-Jun-08 $0.52 $16.47 0.938899 $13.97
16-Sep-08 $0.52 $16.21 0.909716 $13.54
16-Dec-08 $0.52 $ 8.47 0.857096 $12.75

The scorecard will be updated today.


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