Telstra

Proceeds from the NBN arrangements are about to start filling Telstra’s coffers, but any capital management initiatives remain years away. Telstra expects to produce a capital surplus of $500m-$1bn this financial year, which will grow to between $2bn and $3bn by 2014. By then the company should have enough franking credits to consider paying a fully franked special dividend, which is the company’s preferred capital management option. A share buyback was ruled out in the interim due to the paltry size of the surplus. But there are several other impediments to consider. First, management is conscious of taking on...

Proceeds from the NBN arrangements are about to start filling Telstra’s coffers, but any capital management initiatives remain years away. Telstra expects to produce a capital surplus of $500m-$1bn this financial year, which will grow to between $2bn and $3bn by 2014. By then the company should have enough franking credits to consider paying a fully franked special dividend, which is the company’s preferred capital management option. A share buyback was ruled out in the interim due to the paltry size of the surplus.

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