10 percent interest p.a. safe with BASF: A dividend alternative with a security buffer for investors

10 percent interest p.a. safe with BASF: A dividend alternative with a security buffer for investors

According to a report by www.boerse-online.de, BASF is currently offering investors the opportunity to earn 10 percent interest with a dividend alternative and at the same time receive a downward security buffer for the share. Despite declining sales and profits, BASF plans to pay a dividend of 3.40 euros per share next year, which appears uncertain due to the company's current financial situation. The dividend alternative, in the form of a reverse bond, offers investors 10 percent interest per year. If the price of the BASF share is above the strike price on the valuation date, investors will also receive back all of their invested capital. If the price is below the strike price, the underlying asset will be delivered on the redemption date. The bond therefore offers a downward safety buffer and at the same time limits profits to 10 percent.

The dividend alternative is particularly suitable for investors who expect a sideways or slightly negative trend at BASF, as they will have to forego the dividend during the term. This is currently around 8 percent. The reverse convertible bond therefore offers a secure payout and a safety buffer because the base price is below the current price of BASF shares.

The impact of this dividend alternative on the market and consumers depends heavily on how the BASF share price develops. If the price continues to fall, the reverse bond offers investors a certain level of protection and a secure return. However, there is also the risk that BASF shares rebound more than expected, which would limit investors' profits. The choice of this dividend alternative should therefore be carefully considered and tailored to the investor's individual market analysis and risk tolerance.