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What term refers to the money paid to a corporate investors in return for their investment?
The term that refers to the money paid to corporate investors in return for their investment is "dividend." Dividends are typically distributed from a company's profits and can be issued in cash or additional shares of stock. They represent a way for companies to share their earnings with shareholders.
How can you benefit from a high yield investment?
A high-yield investment program is an investment scam that promises unsustainable high return on investment by paying previous investors with the money invested by new investors. The only benefit is that you may get your money back. They are to risky.
The cost of equity and the required rate of return are equal to what?
The cost of equity is the return that investors expect for holding a company's equity, reflecting the risk of the investment. The required rate of return is the minimum return an investor expects to earn from an investment, compensating for its risk. In essence, the cost of equity and the required rate of return are equal as they both represent the expected return that justifies the risk taken by investors in equity securities.
What is implicit rate of return?
The implicit rate of return refers to the rate of return that is assumed or inferred from the cash flows of an investment, rather than explicitly stated. It is often used in the context of evaluating the profitability of an investment by comparing the expected cash inflows to the initial investment. This rate can be calculated using methods such as internal rate of return (IRR) or through discounted cash flow analysis. Essentially, it helps investors assess the potential profitability of an investment based on its projected financial performance.
What is liability on investment contracts?
Liability on investment contracts refers to the obligations that an issuer has to fulfill under the terms of the contract, typically involving the return of principal or payment of interest to investors. These liabilities can arise from various types of investment vehicles, such as bonds, stocks, or mutual funds. They represent a company's commitment to its investors and are recorded on the balance sheet as liabilities, influencing the firm's financial health and risk profile. Understanding these liabilities is crucial for both issuers and investors in assessing the potential risks and returns associated with the investment.
What is expectation premium?
Expectation premium refers to the additional return that investors expect to receive for taking on a certain level of risk. It is essentially the compensation investors demand for holding an asset that may be subject to various uncertainties, such as market fluctuations or economic conditions. The expectation premium is a key consideration for investors when assessing the potential returns from an investment.
What are the different types of debt securities available for investment?
The different types of debt securities available for investment include government bonds, corporate bonds, municipal bonds, and treasury bills. These securities represent loans made by investors to governments or companies in exchange for regular interest payments and the return of the principal amount at maturity.
What is realizable return?
Realizable return refers to the actual return an investor can expect to receive from an investment, considering factors like market conditions, liquidity, and transaction costs. It contrasts with theoretical or expected returns, which may not account for practical limitations. Realizable return is crucial for assessing the true profitability of an investment, as it reflects what can be achieved in the real world. Understanding this concept helps investors make more informed decisions about their portfolios.
Relationship between required rate of return and coupon rate on the value of a bond?
required rate of return is the 'interest' that investors expect from an investment project. coupon rate is the interest that investors receive periodically as a reward from investing in a bond
What advantage and disadvantage for roi?
Return on investment (ROI) is a simple and common criterion used by both investors and company managers when analyzing a business's performance and making company investment decisions. Investors look at a company's invested assets and find out how much return management has been able to generate; managers will undertake new investment projects only if they promise satisfactory returns. Companies use other more advanced measures when selecting among competing investment opportunities, but because of the certain advantages of using return on investment, the measure is still adopted widely for investment evaluation by managers and the conveying of business results to investors. Disadvantages is vise versa.
How can one tell if an investment fund is ethical?
The term 'ethical' is ambiguous. An investment fund has the main priority of returning the maximum dividends for investors, and should be investing in products and industry that will return the highest percentage such as alcohol, tobacco and military research. However, 'Socially Responsible Investment', also known as 'Sustainable Investment' engages in investments that proactively promote and protect the environment, consumer rights, corporate governance and diversity.
What is the advantage of a short term investment?
The advantage of short term investment is to get a maximum return in the shortest time possible. This is typically done by seasoned investors who are confident of a sure hit.
