What is the cost of cost?

Cost revenue is measurement of the amount of return that investors will receive from dividends on specific security. Dividends are bonus payments made to investors to reward them for their loyalty, and also use them to attract new investors. The income from the cost is measured by dividend divide into a share of specific shares on the share costs paid by the investor. It is important to note that the yield depends on the price of security shares that can rise and decrease over time. In the case of shares, this return usually comes if the stock price increases after purchase, thereby increasing the investor's shares. However, dividends that are sometimes paid to companies to their shareholders can also provide significant profits over time. Calculation calculation from costs is a good way for investors to be a certain security potential of securities that owns.

As an example of income from cost, imagine thatE The investor bought 100 shares of shares for $ 20 USD (USD) per share. The company issuing shares will pay a dividend at the end of the year 1 USD for each share. Distribution of $ 1 USD $ 20 brings a quotient 0.05. By transferring to a percentage, it can be found that shares provide 5 percent.

Since the costs paid for shares are a determining factor in the cost of costs, the calculation would change if the shares of certain shares were purchased at different prices on separate occasions. Using the above example, imagine that the same investor built on its 100 shares for $ 20 per share by buying 100 additional shares for $ 30 per share. The average of the costs paid for all shares leaves the total cost per share for $ 25 per share. Connection sum to equations using the same dividend $ 1 per share will reduce the yield to 0.04 or 4 percent.

Investors can look at the history of dividends of a particular society to try to reflect the yieldfrom the cost. Companies are not obliged to pay dividends, but companies that have regularly paid them a permanent rate for a long time can generally be expected to continue practice. A comparison of a typical payment of a dividend company with a market price can provide an investor's estimate of the total dividend yield that it can expect.

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