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The cash the fund uses to pay the dividend is considered an asset of the investment trust. Before it is paid out, that value is added to the value of the stocks/bonds held to calculate the NAV. Once the money is paid out, it is no longer counted as part of the investment trust, thus the NAV goes down by the amount of the dividend.
Example. Mutual fund A has $100 worth of stock, $50 in cash and 100 shares outstanding. It's NAV is $1.50. It pays a total dividend of $50. So now the fund has $100 worth of stock, no cash, and 100 shares outstanding. It's NAV will be $1.00.
What else can I help you with?
What is the difference between exchange traded funds and mutual funds?
Most mutual fund investors take advantage of their fund's automatic dividend reinvestment feature. That saves them the hassle of deciding what to do with the cash that comes their way periodically. If and when the mutual fund pays out a cash dividend, your cut of the dough is automatically reinvested in shares, or partial shares of the fund.
Who pays the highest dividend rate among mutual insurance companies?
Mass Mutual pays 7.6% for 2009
What is the difference between mutul fund with insurance?
In order for there to be a difference, there must be two nouns and a conjunction. I assume the question thus refers to mutual fund and insurance. They are completely different, the best way to describe the difference is simply by stating their definitions. A mutual fund is a fund to invest for several people to pool their resources. Insurance is a contract in which the client pays a given amount for a contingent payment in the future should a given event occur.
What type of stock usually pays a dividend?
established companies
How is preferred stock like a bond in that it offers a fixed dividend payment to investors?
Preferred stock is similar to a bond in that it provides investors with a fixed dividend payment. Just like a bond pays interest to bondholders, preferred stock pays a set dividend to its shareholders.
What is the difference between exchange traded funds and mutual funds?
Most mutual fund investors take advantage of their fund's automatic dividend reinvestment feature. That saves them the hassle of deciding what to do with the cash that comes their way periodically. If and when the mutual fund pays out a cash dividend, your cut of the dough is automatically reinvested in shares, or partial shares of the fund.
Who pays the highest dividend rate among mutual insurance companies?
Mass Mutual pays 7.6% for 2009
What is the difference between mutul fund with insurance?
In order for there to be a difference, there must be two nouns and a conjunction. I assume the question thus refers to mutual fund and insurance. They are completely different, the best way to describe the difference is simply by stating their definitions. A mutual fund is a fund to invest for several people to pool their resources. Insurance is a contract in which the client pays a given amount for a contingent payment in the future should a given event occur.
What type of stock usually pays a dividend?
established companies
What mutual whole life policy pays the highest dividends?
Northwestern mutual
What type of life insurance pays a dividend?
Group life assurance
How is preferred stock like a bond in that it offers a fixed dividend payment to investors?
Preferred stock is similar to a bond in that it provides investors with a fixed dividend payment. Just like a bond pays interest to bondholders, preferred stock pays a set dividend to its shareholders.
What is the difference between a stock dividend and a cash dividend?
A stock dividend is when a company distributes additional shares of its stock to shareholders, while a cash dividend is when a company pays out cash to shareholders as a form of profit sharing.
A common stock which pays a constant dividend can be valued as if it were?
preferredstock
Who fund US?
Anyone who pays federal taxes.
What is MER in mutual Fund?
1. Management Expense Ratio (MER)The MER is an annual fee that's charged to a mutual fund to pay for such expenses as: * management fees paid to the managers of the fund * adviser sales commissions and ongoing service (trailer) fees * legal and audit fees * custodian and transfer agent fees * fund administration expenses * marketing expenses (guess who pays for all those TV, radio and print ads?) Here is a link with answers on other terms. http://www.bylo.org/affordmf.html
How is common stock different from preferred stock?
Common stocks--a type of stock that pays a variable dividend and gives the holder voting rights. Preferred stocks--a type of stock that pays a fixed dividend and carries no voting rights.
