Monday, May 17, 2010

Fair value of noble after XA

When I saw noble, I suddenly remembered that they are going to go XA today. Haha, it just slipped my mind, if not I'll have calculated the fair value of noble before today.

BTW, I chose option 3. Seriously, I didn't really choose it. I can't sell it at the price I wanted, so no choice but to hold it then :)

They are going to give a dividend of 0.036 USD per share, payable on 6th July. I didn't read closely and I suppose that the dividend is only for shares held before XA and doesn't include the new rights shares.

Here's the information required:

Dividend: 0.036 USD per share
Forex: 1.38 (assumed)
Bonus exercise: 6 for 11
Last closing on 14th May: 2.98

The fair value, defined as the price of noble after XA NOW such that there is no change in one's profit/losses BEFORE XA but after distribution of dividend, can be calculated as such:

[2.98 - (1.38 x 0.036)] x (11/17) = 1.896 = 1.90

Currently, noble is having a buy/sell bid of 1.89/1.90 and it opens at 1.90. How would it close?

4 comments :

Createwealth8888 said...

The Final Dividend will be paid on 6 July 2010.

la papillion said...

Hi bro8888,

Thanks, I must have mis-read it. Will change it now :)

Drizzt said...

lets hold it together boss. tell me when u sellinig lol.

drizzt
www.investmentmoats.com

la papillion said...

Hi drizzt,

Oh, you're into this as well? haha :) Good luck to us!