Portfolio management
This query is : Resolved
24 July 2013
exp. rate of return on market portfolio =(dividend earned + capital aapreciation)/ initial investment.
my que. is, in order to compute market return how can v take dividend as its distribution is decided by company itself and not driven by market scenario, then why to consider DIVIDEND while computung market return?
my que. is, in order to compute market return how can v take dividend as its distribution is decided by company itself and not driven by market scenario, then why to consider DIVIDEND while computung market return?
24 July 2013
dividend itself is dependent on many external factors like the taxation policy of country,availability of funds with co etc.
since dividend is one of the form of return it should be included to find out the correct rate of return on the security providing div and other returns.
since dividend is one of the form of return it should be included to find out the correct rate of return on the security providing div and other returns.
24 July 2013
YA THAT IS CORRECT IF WE TALK ABOUT RETURN GIVEN BY THE COMPANY..BUT WHEN TALKNG ABOUT MARKET RETURN WHY IT IS INCLUDED?
24 July 2013
because div is dependent on market condition and this analyst compare various co return including div on shares....div means in real sense opting from so many companies operating in market and putting into shares of a particular co against some risk based on market conditions.
24 July 2013
IF V TAK ABOUT CORPORATE FINANCE BETA OF DEBT CAN BE 0...HOW CAN IT BE? WHEN WE HAVE RAISED FUND THROUGH DEBT THERE IS ALWAYS A RISK.
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