What is a net yield?
net yield refers to the total amount of return on investment of any type of minus the amount of the cost of this investment. As far as shares are concerned, it is the amount of money raised from the sale of shares for the price for which it was originally bought and at the same time factor in foreign costs. The most common of these additional costs is the costs of commissions that are paid to brokers of shares for carrying out shops. Investors are looking for the highest net revenue of their investment. Some are willing to take great risks for huge profits, while others can look for the type of investment that provides long -term stability. In the end, however, all investors want the highest possible return on their investment and therefore a net income is such an important measurement. It measures the exact amount of profits from a specific investment in the stock market.
As an example, imagine that an investor is buying shares for $ 36 USD (USD) per share. After the price is rising, he decides to sell shares when he reaches $ 56 per share. The cost of commissionStranged stock broker for two shops a total of $ 4. In this case, the price for which the stocks are sold, ie $ 56 USD, minus the amount of the price for which it was purchased, or $ 36, and the commission costs $ 4. These calculations lead to a yield of $ 16.
This concept is even more useful in terms of assessment in terms of how much capital was included in the investment. If a lot of money is placed in one share, the investor can leave with a high yield that does not fully match his / her stock expectations. The return rate, which is a net income measured as a percentage of investment, is a good way to measure the positive impact of one investment.
Using the above example of your $ 16, you are measured against the total investment costs of the $ 36 stock purchase price and the cost of commission $ 4. Adding these two amounts brings $ 40. The return rate is achieved by distributing a net income of 16 USD by total investment costs of $ 40, which comes to 0.4. This means that an investor fromIt ruled 40 % return on her investment.