The Australian Foundation Investment Co. Ltd (ASX: AFI) share price is treading lower on Wednesday morning. This comes despite the Melbourne-based listed investment company (LIC) not releasing any market-sensitive news today.
At the time of writing, AFIC shares are down 1.17% to $8.43 apiece. In comparison, the S&P/ASX 200 Index (ASX: XJO) is also down 0.1% to 7,183 points.
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Why are AFIC shares falling today?
With the company's half-year results released late last month, investors are eyeing AFIC shares as they go ex-dividend today.
Typically, one day before the record date, the ex-dividend date, is when investors must have purchased shares. If the investor does not buy AFIC shares before this date, the dividend will go to the seller.
Historically, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors tend to sell off the company's shares after securing the dividend.
What does this mean for AFIC shareholders?
For those eligible for AFIC interim dividend, shareholders will receive a payment of 10 cents per share on 25 February. The dividend is fully franked which means investors will collect tax credits from this.
The interim dividend remains unchanged when compared against the prior corresponding period (H1 FY21).
Furthermore, the final dividend for the 2021 financial year was 14 cents per share, also fully franked.
A Dividend Reinvestment Plan (DRP) and Dividend Substitution Share Plan (DSSP) is available at a 5% discount. This will be based on the volume weighted average price of the company's shares traded on the ASX and Cboe Australia over the five trading days from today.
The last date for the receipt of an election notice for participation in the DRP & DSSP is on 11 February.
AFIC share price summary
Since the beginning of 2022, AFIC shares have gained 15% on the back of positive investor sentiment. The S&P/ASX 200 Financials Index (ASX: XFJ) is up around 10% over the same timeframe.
Based on today's price, AFIC commands a market capitalisation of roughly $10.46 billion and has approximately 1.23 billion shares outstanding.
