Showing posts with label Knowledge. Show all posts
Showing posts with label Knowledge. Show all posts

Cash Dividend



Types of Dividends

Cash Div
Regular Cash Div
Special Cash Div
Stock Div
Stock Repurchase (4 methods)
  1.  Buy shares on the market
  2.  Tender Offer to Shareholders
  3.  Dutch Auction
  4. Private Negotiation (Green Mail)


Dividend Payments
Cash Dividend - Payment of cash by the firm to its shareholders.
Ex-Dividend Date - Date that determines whether a stockholder is entitled to a dividend payment; anyone holding stock before this date is entitled to a dividend.
Record Date - Person who owns stock on this date received the dividend.
Stock Dividend - Distribution of additional shares to a firm’s stockholders.
Stock Splits - Issue of additional shares to firm’s stockholders.
Stock Repurchase - Firm buys back stock from its shareholders.
Friday, March 25, 2011 | 0 comments | Labels:

Return on Equity

Return on Equity (ROE) is a financial ratio that describes the ability of its own capital (equity) to get net profit. In other words  ROE can describe the of the company's ability to generate profits for shareholders, so that this ratio can be the attraction of investors to invest in the company.

The equation can be used to calculate a company's ROE is as follows (Keown et.al, 2008):

ROE = Net Income / Equity

ROE influence on stock return

Results of the study Jauhari (2003)1 proved that the ROE has a significant positive influence on stock return. With the increasing value of ROE will give a fairly good signal to investors and prospective investors that the company is able to use the equity they have to generate income or profit.

However Sasongko & Wulan (2006)2 found a different relationship. Where the results of his research found that profitability ratios like ROA and ROE does not affect the stock price. This means that ROA and ROE can not be used to determine the value of the company.

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1. Jauhari, Robertus Tri Brata. 2003 (Analysis of the influence of debt to equity ratio, price to book value, return on equity, price to earnings ratio and dividend payout ratio on stock return). Accounting master's thesis. Diponegoro University, Semarang.

2. Sasongko, Noer & Wulandari, Nila. 2006 (Effect of EVA and profitability ratios to the stock price). Empirika, Vol. 19 No. 7, Juny 2006.
Tuesday, March 15, 2011 | 0 comments | Labels:

Return on Assets

Sharpe et.al (2006) claimed Return on Assets is one of the financial ratios that are 
intended to measure the performance of the company's main business or how profitable 
and efficient companyin producing (or gain) as well as sell goods and services to
customers.

The equation can be used to calculate the ROA of a company are 
as follows (Sharpe et.al, 2006):



ROA influence on stock return

Research conducted Prihantini (2009) found results that the ROAhas a positive influence 
on stock return. With the increasing value of ROA shows a company's performance is 
getting better, so thatthe benefits to be received by investors will also increase. 

Of course this will attract the investors or prospective investors toinvest funds held in the company. This is in accordance with thestatement of Ang (1997) which states that
corporate profits are increasing signs that will provide operationaland financial 
strength of companies is getting better, thereby providing a positive influence on equity. 
Even Elleuch (2009) in his research found that ROA contribute to the superior level
 of positivecorrelation in predicting stock return.

Nguyen (2004) finance fundamental analysis to look at its relationship with stock 
returns in Japan in the 1993-2003 timeperiod. Research results showed
 that each signal financialfundamentals have positive correlation with stock return. 
Even theratios ROA and ROE is a fundamental signal which has the mostsignificant 
relationship to stock return.



Friday, March 11, 2011 | 1 comments | Labels:

Financial Ratios

The financial ratio is an expression of the relationship between the numbers 
on financial statements to be more meaningful. Mathematically, the financial ratios are not more than the ratio in which the numerator and the denominator is taken from thefinancial data on the financial statements (Keown et.al, 2008).


Usefulness of Financial Ratios


Financial ratios designed to help us evaluate a financial statement,
in order to identify some weaknesses and the company's financial 
strength (Brigham & Houston, 2006). 


Meanwhile, according toKeown et.al (2008) Financial ratios provide two ways how to make a comparison of financial data company, which means:

  • We can examine the ratio between the time to examine thedirection of movement.
  • We can compare the ratio of companies with ratios of othercompanies.

The purpose of the use of a ratio when analyzing the information to be analyzed for the ratio of two different companies can becompared or even a company with
 the boundaries of different times.
Monday, March 7, 2011 | 0 comments | Labels:

Stock return

Stock return is one of the factors which influence an investor's decision to invest in shares. Stock return signifies the returnearned by an investor for an amount of money that has beeninvested. Meanwhile, investment could be interpreted as placing a number of current funds, hoping to gain advantage in the future.

Return can be classified into two types, namely the realization of return and expected return. Return the realization of a return that isactually happening or could be called also return true. While theexpected return is the return which has not happened yet, but is expected to occur in the foreseeable future, by the investor. The equation can be used in the calculation of stock returns is as follows.



Description:

Ri, t = Return stock i for time t
Pt = stock price for time t
Pt-1 = share price for the previous time
Dt = Cash dividends paid
Wednesday, March 2, 2011 | 0 comments | Labels:
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