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| A. Stock dividends are distribution of earnings in the form of the corporation’s (“PSGF”) own shares of stock to existing shareholder’s. |
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| A. No, stock dividends are not subject to tax. |
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| A. The distribution of the 30% stock dividend for PSGF has been approved in the shareholders meeting held last October 29, 2010. |
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| A. The 30% stock dividend will be applied to all existing shareholders as of November 30, 2010 record date. |
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| A. The 30% stock dividend was issued on December 1, 2010. This will be reflected in your Statement of Account for the 4th Quarter 2010. |
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A. There will be no change in the value of the total investment amount. So to the PSGF investor, total number of shares will increase by the approved 30% stock dividends declared but there will be no change in the total investment amount.
However the corresponding NAVPS will decrease by the amount corresponding to the approved 30% dividends being declared. |
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| A. The number of shares being held by the PSGF shareholders will increase to the corresponding 30% of stock dividends declared. For example, if the value of your 100 shares is Php50,000 after receiving the 30% stock dividend, the number of shares will increase to 130 shares, but the amount of investment will still remain at Php50,000. |
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| A. The normal rounding off convention will be applied, where 0.10-0.40 share will be dropped, whereas 0.50 and up share will be rounded up to the nearest 1 share. |
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| A. The percentage of ownership in the PSGF will not change so as with the amount of investment. However since the PSGF investor will be given more shares, the value of each PSGF share may continuously earn as the NAVPS / market goes up. When the value of the shares increases, then you have more to gain by holding on to the shares. |
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| Say: |
Client’s previous holdings: |
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100 shares |
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Stock dividend rate: |
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30% |
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Computation: |
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100 shares |
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x |
30 % |
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30 shares |
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| A. Yes, but only upon distribution of such. |
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| A. Only PSGF has authorized capital shares sufficient to declare stock dividends. |
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