Shares

[angeldraws]

I have some shares that i have had for years and every year i am sent a cheque for around nine gbp. I think i have 350 shares......apparently they are worth 10p per share???

What the heck does it all mean?? Why do i get a cheque for around 9gbp per annum???? Does it mean if i sell them they are worth 350 multiplied by 0.10gbp and if so, why do i get 9 gbp????? Heeeeeeeelllllllppppp.

[dzug]

I very much doubt if they are 'worth' 10p a share if you get �9 a year in dividends. Have you looked up the price in a newspaper? If not that's the best thing to do. I'd guess they are around �1 each.

I suspect you are looking at the share certificate and seeing that they are shares of 10p nominal value. It has nothing to do with what they are worth now - it's what they were worth when issued years ago and is now just an arbitrary label that identifies the shares.

[angeldraws]

Hi dzug - thanks for your reply - yes, you are correct in that i am looking at the share certificate which tells me the shares are 0.10p. They are Friends Provident - and i don't know anything about them......and even if i look up the site, i don't get it...!

[dzug]

Try here: http://uk.finance.yahoo.com/q?d=t&s=FP.L

I was being cautious - they are nearer �2 each now.

[johnny37]

Just looked them up. They are worth 1.92 as at last Friday and the yeald is 4%. This means �1.92 x 350 = �672 @ 4% should give you a divident of about �27 per year, one of �18 and another of �9 (cant remember which comes first). There are better investments but the trade off is that the shares should increase in value.

[Hammer]

They are worth �1.9375 at the mo - so if you sold them you'd get �678 less any commission charged by the broker (normally about �15 if you do it online I think)

The �9 per year you get is the dividend - FP repay some of their profits to shareholders each year basically as an incentice to invest in them. This has nothing to do with the share price.

[angeldraws]

Blimey dzug - that's just what i mean - i don't get it!!! I understand that each share is worth 1.93 but that's about it!!

@ johnny - thanks m8, but can you explain it in 8 year old language??!! (altho' i am much older than that!)...what is the yeald - what does it mean?

@ hammer - that prob makes more sense to me....

Thanks all