Why is the AFIC share price sliding today?

You may be wondering why the Australian Foundation Investment Co. Ltd (ASX: AFI) share price is backtracking today.

At the time of writing, the listed investment company’s (LIC) shares are down 2.45% to $7.95 apiece.

Let’s take a closer look at what’s dragging down AFIC shares on Wednesday.

Shareholders lock in the AFIC dividend

With the earning seasons moving along, AFIC shares are trading ex-dividend today.

This comes after the LIC released its FY22 scorecard on 25 July, reporting double-digit growth across key financial metrics.

The board, however, opted to maintain its final dividend against the prior corresponding period.

The ex-dividend date is particularly important as it determines which shareholders will receive the company’s latest dividend.

If you held AFIC shares at yesterday’s market close, you will be eligible for the final dividend.

When can shareholders expect to be paid?

For those lucky enough to make it on the company’s register on time, you’ll receive a dividend payment of 14 cents per share on 30 August.

The dividend is fully franked at a corporate tax rate of 30%, which means you will receive some tax credits.

In addition, you can elect for the dividend reinvestment plan (DRP) which will add a portion of shares to your portfolio instead. This will be based on a five-day volume-weighted average price (VWAP) from 10 August to 16 August.

The DRP discount rate is set at 5% and the last election date to opt in is on 12 August.

AFIC share price summary

After reaching a 52-week low of $7.40 on 20 June, the AFIC share price has rebounded these past few months.

Although, its shares are just below a key resistance level of around the $8.20 mark

If it can break this level, then AFIC shares could top out to $8.50 if the market remains stable.

Based on today’s price, AFIC commands a $9.7 billion market capitalisation and has a trailing dividend yield of 3.15%.

The post Why is the AFIC share price sliding today? appeared first on The Motley Fool Australia.

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More reading

• The CBA share price looks downright expensive
• Why I prefer AFIC shares to an ASX 200 index fund today
• Keen to bag the next AFIC dividend? Read this
• Why did the AFIC share price have such a top run in July?
• Why is the AFIC share price outperforming on Monday?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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