In 2021, Milton Corporation Limited (ASX: MLT) announced that the independent Milton directors have determined to pay special dividend of 37 cents for each Milton share held by shareholders as at the record date, on 22^nd of September 2021.

Some investors recognize this announcement as a good news for Milton Corporation, while other investors sell Milton shares as they believe it is a bad news. Explain why investors have different point of views about this announcement.

We observed that the trading volume of Milton stock increased significantly around the ex-dividend date. Ignoring the impact of franking credit, what does the dividend-capture theory imply about the volume of trade in a stock around the ex-dividend day?

Empirical evidence only supports dividend-capture theory when a company pays large special dividends. Why do many high-tax investors continue to hold stocks even when dividends (small ordinary dividends) are paid?

Answer rating: 100% (QA)

1 Different Points of Views on the Special Dividend Announcement Investors may have different viewpoints about the special dividend announcement due to their investment objectives strategies and persp... View the full answer