Stocks_Comments_Exercises_Answers

Stocks_Comments_Exercises_Answers - Stocks The numbers of...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Stocks The numbers of shares in a company are completely  arbitrage; therefore comparing  directly the dividend per share can be a misleading measure of how desirable a stock  investment is. The dividend yield is a better measure of how desirable a stock investment is. There are important differences between current dividend yield and trailing dividend  yield. The former one is based on the dividend payments on current year; however the  last one is based on dividend payments from past’s years.  The Yield is a moving target. It is based on the market price of the stock, which changes,  and also is based on the dividend at a particular point in time, which has probably not  been the same over the company lifetime. The compound annual growth rate (CAGR) formula is used for estimating  the rate of  capital gain/loss of an investment. There is a fundamental difference between  the CAGR and the total return on the 
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

Stocks_Comments_Exercises_Answers - Stocks The numbers of...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online