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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
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Author: rnam ✧  😊 😞
Number: of 15065 
Subject: Re: OT: Hershey
Date: 11/02/2023 3:38 PM
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No. of Recommendations: 1
By buying a call instead of stock you are also foregoing the dividend. For the Jan 2026 call, you are foregoing 9 quarterly payments. The current quarterly dividend is 1.19% and Hershey usually has a 10% dividend growth CAGR.

Taking the after tax impact of foregone dividends gives me an option cost of 6% and an implied borrow interest rate of 5.5%. Your results may vary based on your tax rate on dividends.

This is still a very low interest rate, as you can currently own close to that on very safe treasury money market funds.
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