2% in 4 months idea

Its in the news that Blackstone is buying Croesus Trust at $1.17. Why is it trading above $1.17?

The reason is that if the deal goes through, on 31 Oct 2017, approximately 4.06 cents will be distributed per share.

I have calculated that based on commission of 0.3% on purchase, the net return after commission over a period of 4 months (not annualized) is:

  • Buy at $1.17, net yield is 3.16%
  • Buy at $1.175, net yield is 2.72%
  • Buy at $1.18, net yield is 2.29%
  • Buy at $1.185, net yield is 1.85%
  • Buy at $1.19, net yield is 1.43%
  • Buy at $1.19, net yield is 1.00%

For the calculation above, I have not factored in any leverage yet.

It may be a good idea to try my luck to queue at $1.18.

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