Can anyone explain the indifference point between dividend & Capital gain
what this mean >??
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Think of it from a taxation point of view. The idea behind the dividend indifference point is to make the investor be indifferent between receiving dividends and selling his shares to get homemade dividends, due to (1-TD) = (1-TCG), where, TD = Tax on dividend and TCG = Tax on Capital Gain.
how can we interpret this Indifference Capital Gain of 3.89..?
On ex dividend date price would fall by (1-td/1-tcg)*dividend amount.