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Stockholders can earn a return on their investment in two manners. Most commonly Stock Appreciation, and rarer Dividends.
The most common manner for an investor to earn on stocks is through "Stock Appreciation." This means the stock price has risen, and now allows for an investor to receive more for the asset than what they paid. This is generally most associated with the class of stock known as "Common Stock."
Although rarer, and often reserved for early investors and company insiders there is another class of stock known as "PREFERRED STOCK." Preferred Stock can also pay a "DIVIDEND" quarterly, annually or intermittently. A dividend is a payment of a share of profits sent to holders of the preferred stock.
Wiki User
∙ 13y ago
Wiki User
∙ 9y agoPeople who buy stock become shareholders in a company which makes them a part owner of the enterprise they invest in. Shareholders can vote on matters of importance at the annual shareholders meeting but are not engaged in the day to day operations of the business. Shareholders can earn a return on their investment through dividends and/or capital appreciation. Cash dividends are typically paid on a quarterly basis and historically have comprised a significant amount of an investors total return. Companies that are fast growing and need earnings to reinvest in the business will usually not pay dividends but the fast growth should lead to an increase in the share price which will increase the value of the original investment.
Wiki User
∙ 6y ago- The Stock could pay a dividend.
- The Stock could appreciate in value and the person could sell it for a profit.
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What is the Income you earn on an investment called?
Return
What most accurately states one of the risk of being a stock holder?
Stockholders aren't guaranteed a return on their investment.
How much interest would you earn of a 30000 investment?
Depends on how you invested it and what rate of return that investment delivered.
How would you describe the cost of capital?
The minimum rate of return the company must earn to be willing to make the investment. It is the rate of return the company could earn if, rather than making the capital investment, it invested the money in an alternative, but comparable, investment.
Match the items below to show the risks benefitsand powers of stockholders?
power: stockholders can sell at any time risk:arent guaranteed a return on investment benefit: recieve dividends when company makes profit APEX (:
The accounting rate of return on stockholders investments is measured by?
The accounting rate of return stockholders investments is measured by?
What is the portion of corporate profits paid out to stockholders called?
The portion corporate profits paid out of stockholders is A dividend is quarterly payment to stockholders of record, as a return on investment. Dividends may be in cash, stock, or property, and are declared from operating surplus. If there is no surplus, the payment is considered a return on capital. Dividend payments are, in effect, taxed twice-once when corporate profits are taxed and again when the dividend is received by a taxpaying stockholder. The corporate profits paid out to stockholders is called dividends.
How is the accounting rate of return on stockholders investments measured?
return on equity
How do you Calculate a Return on an Investment?
The return on investment formula:ROI=(Gain from Investment - Cost of Investment)/Cost of Investment.
What is the rate of return a firm must earn on its investment projects in order to maintain the market value of its stock?
cost of capital :)
What is opportunity cost rate?
The opportunity cost rate is the rate of return you could earn on an alternative investment of similar risk.
Do stockholders of the Greenbay Packers receive a championship ring if the team wins?
"No the stockholders dont even get a return on their investment" Actually, WHEN the Green Bay Packers win a championship the shareholders are offered a ring. It is like the director and coach get a different ring than the player ring. The shareholders are offered a "Shareholders" ring.
