TORONTO - Canadian Banc Corp. (TSX;BK) is changing the distribution policy related to its class A shares in a way that will result in an immediate increase of more than 42 per cent to its monthly dividend.
The Toronto-based mutual fund company, which invests mainly in the country's largest banks, says shareholders of record on Sept. 30 will receive 7.6 cents per share in the next payment on Oct. 10, up from 5.3 cent previously.
In making the announcement Tuesday, that company said it believes the new policy will better reflect actual returns on its underlying portfolio.
Under the new distribution policy, the monthly dividend payable on the class A shares will be determined by applying a 10 per cent annualized rate on the volume weighted average market price of the shares over the last three trading days of the preceding month.
"Effectively, the actual amount of monthly distributions paid will vary with the market price, but the current yield will remain stable at 10 per cent under this new distribution policy," it said.
The company shares closed Tuesday at $9.36 on the Toronto Stock Exchange.
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