Dividend disadvantage

The dividend disadvantage arises if a share is acquired in the current year, but no dividend is distributed for the period during which capital is made available. This is offset by the preferential treatment of subscription rights . Depending on the time of acquisition of the share, the subscription right of the share is reduced. The dividend is thus paid out indirectly via the reduced subscription right price.

${\displaystyle \mathrm {BR} ={\frac {K_{\mathrm {alt} }-(K_{\mathrm {neu} }+\mathrm {Dividende} \cdot (1-n/12))}{\mathrm {BV} +1}}}$

• BR: value of a subscription right
• C _old : market price of the old shares
• K _new : issue price of the new shares
• Dividend: expected dividend
• n : months prior to distribution
• BV: subscription ratio

example

Example AG, with subscribed capital of EUR 20 million, intends to undertake a capital increase of EUR 5 million by issuing new shares. The subscription ratio is therefore 4: 1. The issue price for the new share is set at 90 euros. The price of the old shares is 130 euros.

What is the value of the subscription right after deduction of the dividend disadvantage if the new shares are entitled to dividends for the current financial year from September 1st?

${\displaystyle {\frac {130-(90+15\cdot (1-4/12))}{4+1}}=6=\mathrm {BR} }$

The subscription right for a share costs only 6 euros instead of 8 euros at the time the new shares are issued at the time the dividend is paid out.