The Newcrest Mining Ltd (ASX: NCM) share price is rising on Thursday morning.
At the time of writing, the gold miner's shares are up 0.5% to $24.06.
Why is the Newcrest share price rising?
Investors have been buying the company's shares this morning after it announced plans to reward shareholders with a special dividend.
According to the release, the Newcrest board has determined to pay a fully franked dividend of US$1.10 per share. This equates to approximately A$1.74 per share at current exchange rates.
Based on where the Newcrest share price closed yesterday's session, this represents a very generous 7.3% dividend yield.
What's going on?
As readers may be aware, Newcrest is currently in the process of being acquired by US gold mining giant Newmont Corporation (NYSE: NEM).
The two parties have agreed terms on a deal that will see Newcrest shareholders receive 0.4 Newmont shares for each share they own. The agreement also permitted Newcrest to pay a fully franked special dividend of up to US$1.10 per share.
Combined, at the time of the agreement, this implied an offer of $29.27 per share and valued Newcrest at $28.8 billion.
When is this dividend being paid?
The release reveals that eligible shareholders will be paid this special dividend later this month on 27 October. However, this is dependent on shareholders voting in favour of the takeover at a scheme meeting on 13 October. If the deal is not approved, the dividend will be cancelled.
To be eligible for the proposed dividend, you will need to own Newcrest shares before they go ex-dividend on 18 October.
The Newcrest share price is now up a sizeable 34% over the last 12 months.
