A rough calculation for the forward-looking risk premium would add the dividend yield of 3% to expected long-term nominal dividend growth (in line with GDP) of 5% and then subtract the ten-year bond yield of 2.7%.
Over the years, however, the company has also bought back stock and has periodically supplemented its nominal dividend with bigger special payouts.
But the simple fact is that while the nominal dividend and its yield have been shooting higher, that hasn't come on any extra ability to actually fund the payout.
We had a nominal dividend last year of $8 a share.
Market hopes had risen lately that the bank would get the Fed's OK to raise its nominal dividend of a penny per share.
Since 1926, nominal American dividends have risen 37-fold.Perhaps the outlook for future dividends is really that bad.
(Typical of many financing rounds, including our own past rounds, there was a nominal 3% dividend for a class of shares).
Preference shares are so called because they are entitled by the terms on which they are issued to payment of a dividend of a fixed amount (usually expressed as a percentage of their nominal value) before any dividend is paid to the ordinary shareholders.
But this entire arrangement, where banks contribute capital to the Fed system and then receive dividends, is more nominal than anything else.
