Investment analysis of the common stocks of selected California banks. - Page 150 |
Save page Remove page | Previous | 150 of 185 | Next |
|
small (250x250 max)
medium (500x500 max)
Large (1000x1000 max)
Extra Large
large ( > 500x500)
Full Resolution
All (PDF)
|
This page
All
|
137
i n d i r e c t l y c o n s id e r th e d iv id e n d s p e r s h a r e . The
su g g e ste d f o m n i a developed i n t h e book S e c u r ity A n a ly s is
ap p e a rs re a s o n a b le f o r bank s to c k s , and i t i s a s
fo llo w s :^
V » M (D + j )
V » I n v e s t m e n t v a l u e
M * I n v e s tm e n t m u l t i p l i e r
D « D iv id e n d s p e r s h a r e ,i
E « E a r n i n g s p e r s h a r e j
A n o rm a l d i v i d e n d p a y - o u t r a t i o f o r m ost s t o c k s
i s t w o - t h i r d s o f e a r n i n g s T h u s t h e above f o r m u l a ;
c o u l d j u s t a s l i k e l y r e a d V s M ( 2 /3 E + 1 /3 H) o r j
V ** M X E . Even i f a bank d id n o t p ay t w o - t h i r d s o f j
e a r n i n g s i n t h e form o f d i v i d e n d s , t h e f o r m u la s t i l l J
co m p e n s a te s f o r t h i s m a t h e m a t i c a l l y . I t p l a c e s a h i g h e r
v a l u e on more t h a n t w o - t h i r d s e a r n i n g p a y - o u t and a lo w e r ,
v a l u e on s t o c k s t h a t p a y l e s s t h a n t w o - t h i r d s e a r n i n g s . |
I
F o r e x a m p le , i f tw o b a n k s h ad t h e same a n t i c i p a t e d f u t u r e
e a r n i n g s o f $12 p e r s h a r e , and b o t h h ad a n i n v e s t m e n t
m u l t i p l i e r o f 1 0 , b u t one b ank p a i d o u t $4 p e r s h a r e i n
d i v i d e n d s an d t h e o t h e r o n ly p a i d o u t $3 p e r s h a r e , t h e j
f
r e s u l t w ould a p p e a r a s f o l l o w s : 1
^ I b i d . , p . 454
Object Description
Description
| Title | Investment analysis of the common stocks of selected California banks. - Page 150 |
| Repository email | cisadmin@lib.usc.edu |
| Full text | 137 i n d i r e c t l y c o n s id e r th e d iv id e n d s p e r s h a r e . The su g g e ste d f o m n i a developed i n t h e book S e c u r ity A n a ly s is ap p e a rs re a s o n a b le f o r bank s to c k s , and i t i s a s fo llo w s :^ V » M (D + j ) V » I n v e s t m e n t v a l u e M * I n v e s tm e n t m u l t i p l i e r D « D iv id e n d s p e r s h a r e ,i E « E a r n i n g s p e r s h a r e j A n o rm a l d i v i d e n d p a y - o u t r a t i o f o r m ost s t o c k s i s t w o - t h i r d s o f e a r n i n g s T h u s t h e above f o r m u l a ; c o u l d j u s t a s l i k e l y r e a d V s M ( 2 /3 E + 1 /3 H) o r j V ** M X E . Even i f a bank d id n o t p ay t w o - t h i r d s o f j e a r n i n g s i n t h e form o f d i v i d e n d s , t h e f o r m u la s t i l l J co m p e n s a te s f o r t h i s m a t h e m a t i c a l l y . I t p l a c e s a h i g h e r v a l u e on more t h a n t w o - t h i r d s e a r n i n g p a y - o u t and a lo w e r , v a l u e on s t o c k s t h a t p a y l e s s t h a n t w o - t h i r d s e a r n i n g s . | I F o r e x a m p le , i f tw o b a n k s h ad t h e same a n t i c i p a t e d f u t u r e e a r n i n g s o f $12 p e r s h a r e , and b o t h h ad a n i n v e s t m e n t m u l t i p l i e r o f 1 0 , b u t one b ank p a i d o u t $4 p e r s h a r e i n d i v i d e n d s an d t h e o t h e r o n ly p a i d o u t $3 p e r s h a r e , t h e j f r e s u l t w ould a p p e a r a s f o l l o w s : 1 ^ I b i d . , p . 454 |
