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how do you do a dividend discount model
the calculation for the dividend discount model is intrinsic value sum of present value of dividends present value of stock sales price
what is the 25 dividend rule
if a dividend will be high the price of the stock may fall by the value of the dividend on the ex dividend date the 25 dividend rule states that if the dividend is 25 or more than the stock s value then the ex dividend date will be deferred to one business day after the dividend is paid 9the bottom linethe dividend dis...
the dividend growth rate is the annualized percentage rate of growth that a particular stock s dividend undergoes over a period of time many mature companies seek to increase the dividends paid to their investors on a regular basis knowing the dividend growth rate is a key input for stock valuation models known as divi...
understanding the dividend growth ratebeing able to calculate the dividend growth rate is necessary for using the dividend discount model the dividend discount model is a type of security pricing model the dividend discount model assumes that the estimated future dividends discounted by the excess of internal growth ov...
how to calculate the dividend growth rate
an investor can calculate the dividend growth rate by taking an average or geometrically for more precision as an example of the linear method consider the following a company s dividend payments to its shareholders over the last five years were to calculate the growth from one year to the next use the following formul...
what is a good dividend growth rate
a good dividend growth rate can be different for every investor generally investors should seek out companies that have provided 10 years of consecutive annual dividend increases with a 10 year dividend per share compound annual growth rate cagr of 5 1
what is the difference between dividend yield and dividend growth
dividend yield is the amount that a company pays out in dividends compared to its stock price dividend growth is the increase in the value of dividends that a company pays out over a period of time
do dividends grow every year
whether or not dividends grow every year will depend on the company generally well established companies that pay dividends will ensure that dividends grow every year however it is not guaranteed that dividends grow every year the bottom linedividends can be a great boon to investor portfolios providing a regular strea...
what is dividend irrelevance theory
dividend irrelevance theory posits that dividends don t have any effect on a company s stock price a dividend is typically a cash payment made from a company s profits to its shareholders as a reward for investing in the company dividend irrelevance theory goes on to state that dividends can hurt a company s ability to...
why do companies pay dividends
companies pay dividends as a way to share profits with shareholders not all companies pay dividends
how are dividends paid
in general dividends are paid in cash dividend payments can also be reinvested in the stock distributing them to buy more shares who is eligible for stock dividends shareholders who buy or already own a company s stock before the ex dividend date will receive dividends on the date of payment a company s board of direct...
what is a dividend payout ratio
the dividend payout ratio is the total amount of dividends that a company pays to shareholders relative to its net income put simply this ratio is the percentage of earnings paid to shareholders via dividends the amount not paid to shareholders is retained by the company to pay off debt or to reinvest in its core opera...
when comparing these two measures it s important to know that the dividend yield tells you what the simple rate of return is in the form of cash dividends to shareholders but the dividend payout ratio represents how much of a company s net earnings are paid out as dividends
while the dividend yield is the more commonly known and scrutinized term many believe the dividend payout ratio is a better indicator of a company s ability to distribute dividends consistently in the future the dividend payout ratio is highly connected to a company s cash flow the dividend yield shows how much a compa...
why is the dividend payout ratio important
the dividend payout ratio is a key financial metric used to determine the sustainability of a company s dividend payment program it is the amount of dividends paid to shareholders relative to the total net income of a company
how do you calculate the dividend payout ratio
it is commonly calculated on a per share basis by dividing annual dividends per common share by earnings per share
is a high dividend payout ratio good
a high dividend payout ratio is not always valued by active investors an unusually high dividend payout ratio can indicate that a company is trying to mask a bad business situation from investors by offering extravagant dividends or that it simply does not plan to aggressively use working capital to expand
when comparing the two measures of dividends it s important to know that the dividend yield tells you what the simple rate of return is in the form of cash dividends to shareholders but the dividend payout ratio represents how much of a company s net earnings are paid out as dividends
the bottom linesome companies decide to reward their shareholders by sharing their financial success this happens through dividends which are paid at regular intervals to shareholders throughout the year the dividend payout ratio is the total amount of dividends that companies pay to their eligible investors expressed ...
what is dividend per share dps
dividend per share dps is the sum of declared dividends issued by a company for every ordinary share outstanding the figure is calculated by dividing the total dividends paid out by a business including interim dividends over a period of time usually a year by the number of outstanding ordinary shares issued a company ...
why is dividend per share dps important to investors
dps is an important metric to investors because the amount a firm pays out in dividends directly translates to income for the shareholder it is the most straightforward figure an investor can use to calculate their dividend payments from owning shares of a stock over time a consistent increase in dps over time can also...
how is dps calculated
dividends over the entire year not including any special dividends must be added together for a proper calculation of dps including interim dividends special dividends are dividends that are only expected to be issued once and are therefore not included interim dividends are dividends distributed to shareholders that h...
what is the retention ratio
the retention ratio also called the plowback ratio is the proportion of earnings kept back in the business as retained earnings it refers to the percentage of net income that is retained to grow the business rather than being paid out as dividends it is the opposite of the payout ratio which measures the percentage of ...
what is a dividend policy
a dividend policy outlines how a company will distribute its dividends to its shareholders this policy details specifics about payouts including how often when and how much is distributed there are many types of dividend police including stable constant and residual policies investopedia crea taylorunderstanding divide...
how a dividend policy works
some companies choose to reward their common stock shareholders by paying them a dividend a dividend is paid on a regular basis and usually represents a portion of the profits that these companies earn this gives shareholders a regular stream of income which is why dividend paying stocks are a favorite for some investo...
what are dividends
dividends are paid by companies to their common shareholders they represent a portion of the corporate earnings or profits that companies want to share with their investors dividends are paid at regular intervals either monthly quarterly or annually as such they provide a regular stream of income for investors dividend...
what are the main types of dividends
dividend paying companies have several options when it comes to the type of dividend they offer shareholders they can pay dividends in cash which is the most common type or they can offer stock dividends give shareholders additional existing shares in the company other less common types of dividends are the scrip divid...
do all companies pay dividends to their shareholders
no not all companies pay dividends to their shareholders and they are not mandatory a company s board of directors decides what to do with its profits some choose to reinvest the money they earn back into the company to fuel growth these companies have no dividend policy others choose to take a portion of the profits a...
what is a dividend rate
the dividend rate is the total expected dividend payments from an investment fund or portfolio expressed on an annualized basis plus any additional non recurring dividends that an investor may receive during that period depending on the company s preferences and strategy the dividend rate can be fixed or adjustable the...
how is a dividend rate calculated
the calculation of the dividend rate of an investment fund or portfolio involves multiplying the most recent periodic dividend payments by the number of payment periods in one year for example if a fund of investments pays a dividend of 50 cents quarterly and also pays an extra dividend of 12 cents per share because of...
what is dividend recapitalization
a dividend recapitalization also known as a dividend recap happens when a company takes on new debt in order to pay a special dividend to private investors or shareholders this usually involves a company owned by a private investment firm which can authorize a dividend recapitalization as an alternative to the company ...
what is the dividends received deduction drd
the dividends received deduction drd is a federal tax deduction in the united states that is given to certain corporations that get dividends from related entities the amount of the dividend that a company can deduct from its income tax is tied to how much ownership the company has in the dividend paying company howeve...
how the dividends received deduction drd works
the dividends received deduction allows a company that receives a dividend from another company to deduct that dividend from its income and reduce its income tax accordingly however several technical rules apply that must be followed for corporate shareholders to be entitled to the drd the amount of drd that a company ...
what is the dividends received deduction drd
the dividends received deduction drd is a federal tax deduction in the united states that is given to certain corporations that get dividends from related entities the amount of the dividend that a company can deduct from its income tax is tied to how much ownership the company has in the dividend paying company howeve...
how the dividends received deduction drd works
the dividends received deduction allows a company that receives a dividend from another company to deduct that dividend from its income and reduce its income tax accordingly however several technical rules apply that must be followed for corporate shareholders to be entitled to the drd the amount of drd that a company ...
what is the dividend yield
the dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price the reciprocal of the dividend yield is the total dividends paid net income which is the dividend payout ratio investopedia michela buttignolunderstanding dividendsbefore we jump into lookin...
when comparing measures of corporate dividends it s important to note that the dividend yield tells you what the simple rate of return is in the form of cash dividends to shareholders
however the dividend payout ratio represents how much of a company s net earnings are paid out as dividends while the dividend yield is the more commonly used term many believe the dividend payout ratio is a better indicator of a company s ability to distribute dividends consistently in the future the dividend payout r...
what does the dividend yield tell you
the dividend yield is a financial ratio that tells you the percentage of a company s share price that it pays out in dividends each year for example if a company has a 20 share price and pays a dividend of 1 per year its dividend yield would be 5 if a company s dividend yield has been steadily increasing this could be ...
why is dividend yield important
some investors such as retirees are heavily reliant on dividends for their income for these investors the dividend yield of their portfolio could have a meaningful effect on their personal finances making it very important for these investors to select dividend paying companies with long track records and clear financi...
is a high dividend yield good
yield oriented investors will generally look for companies that offer high dividend yields but it is important to dig deeper in order to understand the circumstances leading to the high yield one approach taken by investors is to focus on companies that have a long track record of maintaining or raising their dividends...
which stock has the highest dividend yield
this will depend on the timeframe you look at dividend yields change daily as the prices of shares that pay dividends rise or fall some stocks with very high dividend yields may be the result of a recent downturn in share price and oftentimes that dividend will be slashed or eliminated by the managers if the stock pric...
what is documentary collection
documentary collection is a form of trade finance in which an exporter is paid for its goods by an importer after the two parties banks exchange the required documents the exporter s bank collects funds from the importer s bank in exchange for documents releasing title to the shipped merchandise usually after the goods...
what is the dodd frank wall street reform and consumer protection act
the dodd frank wall street reform and consumer protection act commonly known as the dodd frank act or dodd frank is legislation that was passed by the u s congress in response to financial industry behavior that led to the financial crisis of 2007 2008 it sought to make the u s financial system safer for consumers and ...
when donald trump was elected president in 2016 he pledged to repeal dodd frank siding with critics the u s congress passed the economic growth regulatory relief and consumer protection act which rolled back significant portions of the dodd frank act
it was signed into law by then president trump on may 24 2018 9these are some of the provisions of that law and some of the areas in which previous standards were loosened after joseph biden was elected president in 2020 the cfpb focused on rescinding rules from the trump era that were in direct conflict with the chart...
what was the purpose of the dodd frank act
dodd frank was intended to curb the extremely risky financial industry activities that led to the financial crisis of 2007 2008 its goal was and still is to protect consumers and taxpayers from egregious practices like predatory lending
is the dodd frank act still in effect
yes it is however its regulatory strength was diluted with the passage of the economic growth regulatory relief and consumer protection act in 2018 still certain aspects such as the bank stress tests it called for are in use today the federal reserve publishes stress test results regularly 15
what are some criticisms of the dodd frank act
detractors of the dodd frank act have argued that the law could harm the competitiveness of u s firms relative to their foreign counterparts in particular critics contend that its regulatory compliance requirements unduly burden community banks and smaller financial institutions despite the fact that they played no rol...
what was the impact of the 2018 rollback of dodd frank regulations
under the dodd frank rules banks with 50 billion in assets were subject to more strenuous capital and liquidity requirements but the new law passed in 2018 increased the asset threshold to 250 billion this change relaxed the regulations for smaller and medium sized banks when silicon valley bank collapsed in march 2023...
what are dogs of the dow
dogs of the dow is an investment strategy that attempts to beat the dow jones industrial average djia each year by leaning portfolios toward high yield investments the general concept is to allocate money to the 10 highest dividend yielding blue chip stocks among the 30 components of the djia this strategy requires re...
how the dogs of the dow strategy works
the idea is to make stock picking somewhat easy and relatively safe the latter because the universe is limited to blue chip stocks as a tactic dogs of the dow goes like this after the stock market closes on the last day of the year select the 10 highest dividend yielding stocks in the djia then on the first trading day...
is there an etf that tracks the dogs of the dow
there isn t an etf that specifically invests in the dogs of the dow strategy by investing in the top 10 dividend performing companies in the dow however there are etfs that invest in a similar strategy with a dividend focus on the dow such as the invesco dow jones industrial average dividend etf djd and the alps intern...
what companies are in the dogs of the dow
the companies that make up the dogs of the dow in 2023 are
how are the dogs of the dow chosen
the strategy in choosing the dogs of the dow is simple the 10 companies in the dow jones industrial average that pay the highest dividend yield as of the last trading day of the year are chosen to be in the dogs of the dow 1the bottom linethough the dow of dogs has slightly underperformed the djia in the past 10 years ...
what is a doji
a doji d ji is a name for a trading session in which a security has open and close levels that are virtually equal as represented by a candle shape on a chart based on this shape technical analysts attempt to make assumptions about price behavior doji candlesticks can look like a cross inverted cross or plus sign altho...
what does a doji tell investors
in japanese doji means the same thing a reference to the rarity of having the open and close price for a security be exactly the same depending on where the open close line falls a doji can be described as a gravestone long legged or dragonfly as shown below image by julie bang investopedia 2019technical analysts belie...
what is the difference between a doji and a spinning top
candlestick charts can be used to discern quite a bit of information about market trends sentiment momentum and volatility the patterns that form in the candlestick charts are signals of such market actions and reactions doji and spinning tops show that buying and selling pressures are essentially equal but there are d...
what is a dragonfly doji candle
the dragonfly doji is a candlestick pattern stock that traders analyze as a signal that a potential reversal in a security s price is about to occur depending on past price action this reversal could be to the downside or the upside the dragonfly doji forms when the stock s open close and high prices are equal it s not...
what is a gravestone doji candle
a gravestone doji candle is a pattern that technical stock traders use as a signal that a stock price may soon undergo a bearish reversal this pattern forms when the open low and closing prices of an asset are close to each other and have a long upper shadow the shadow in a candlestick chart is the thin part showing th...
what is a long legged doji candle
the long legged doji is a type of candlestick pattern that signals to traders a point of indecision about the future direction of a security s price this doji has long upper and lower shadows and roughly the same opening and closing prices in addition to signaling indecision the long legged doji can also indicate the b...
is a doji bullish or bearish
a doji formation generally can be interpreted as a sign of indecision meaning neither bulls nor bears can successfully take over of its variations the dragonfly doji is seen as a bullish reversal pattern that occurs at the bottom of downtrends the gravestone doji is read as a bearish reversal at the peak of uptrends
how can a doji be used in cryptocurrency trading
as with stocks and other securities the formation of a doji candlestick pattern can signal investor indecision about a cryptocurrency asset the bottom linea doji candle chart occurs when the opening and closing prices for a security are just about identical if this price is close to the low it is known as a gravestone ...
what is dollar cost averaging
investing can be challenging even experienced investors who try to time the market to buy at the most opportune moments can come up short dollar cost averaging is a strategy that can make it easier to deal with uncertain markets by making purchases automatic it also supports an investor s effort to invest regularly dol...
how dollar cost averaging works
dollar cost averaging is a simple tool that an investor can use to build savings and wealth over the long term it is also a way for an investor to ignore short term volatility in the broader markets a prime example of long term dollar cost averaging is its use in 401 k plans in which employees invest regularly regardle...
is dollar cost averaging a good idea
it can be when dollar cost averaging you invest the same amount at regular intervals and by doing so hopefully lower your average purchase price you will already be in the market when prices drop and when they rise for instance you ll have exposure to dips when they happen and don t have to try to time them by investin...
why do some investors use dollar cost averaging
the key advantage of dollar cost averaging is that it reduces the negative effects of investor psychology and market timing on a portfolio by committing to a dollar cost averaging approach investors avoid the risk that they will make counter productive decisions out of greed or fear such as buying more when prices are ...
how often should you invest with dollar cost averaging
with regard to actually using the strategy how often you use it may depend on your investment horizon outlook on the market and experience with investing if your outlook is for a market in flux that will eventually rise then you might try it if a persistent bear market s at work then it wouldn t be a smart strategy to ...
what is the dollar duration
the dollar duration measures the dollar change in a bond s value to a change in the market interest rate the dollar duration is used by professional bond fund managers as a way of approximating the portfolio s interest rate risk dollar duration is one of several different measurements of bond s duration as duration mea...
where
while dollar duration refers to an individual bond price the sum of the weighted bond dollar durations in a portfolio is the portfolio dollar duration dollar duration can be applied to other fixed income products as well that have prices that vary with interest rate moves dollar duration vs other duration methodsdollar...
what is dollarization
dollarization is the term for when the u s dollar is used in addition to or instead of the domestic currency of another country it is an example of currency substitution dollarization usually happens when a country s own currency loses its usefulness as a medium of exchange due to hyperinflation or instability understa...
what is a domestic corporation
a domestic corporation is a company that conducts its affairs in its home country a domestic business is often taxed differently than a non domestic business and may be required to pay duties or fees on the products it imports typically a domestic corporation can easily conduct business in other states or parts of the ...
what is a domestic relations order dro
a domestic relations order dro is a court order that gives a spouse or dependent the right to receive all or a portion of the benefits of an employee s qualified retirement plan in the event of divorce a dro is usually sent to a plan administrator or employer for review and if it meets certain laws it will result in th...
what is a domicile
a domicile is the place where you maintain a permanent home because it s your fixed or principal place of residence your domicile is used in a variety of legal or tax purposes understanding domicilesat birth your domicile of origin is the home you share with your parents or legal guardians this location remains your do...
when you move it may be necessary to take steps to establish and prove your new domicile here are a few things you should consider
inform the professionals in your life from doctors to dentists of your move and update your new address with all of your credit cards passport bank and brokerages utilities and cell phone providers set up bank accounts with your new local branch and if you have young children sign them up for the local schools and sign...
what is the definition of domicile
the legal definition of domicile is the address you declare in legal documents to pay taxes receive social security vote bank and register vehicles and animals
what is the difference between a residence and a domicile
a residence is a location where you may live part time or full time a domicile is your legal address and your domicile is located in the state where you pay taxes 2
how do i know my domicile
you will know your domicile because it will be the state and location you consider your permanent home it s the location where you probably maintain your social economical and family ties your domicile is also the place where you pay taxes vote and have a driver s license
what are the types of domicile
domiciles can be any house or apartment condominium or co op it is the place where you plan to live indefinitely you can have more than one residence but your domicile is your forever home
what is my tax domicile
your tax domicile is your permanent home where you pay your state income tax the bottom lineyou may live in many places or even own multiple homes but you can only have one domicile when you reach the age of majority previously your domicile is the home you share with your parent or legal guardian it is possible to rel...
what are donchian channels
donchian channels are a tool in technical analysis used to determine the relative volatility of a market and the potential for price breakouts to form it three lines are generated from moving average calculations that produce a filled in channel formed by upper and lower bands around a midrange band the upper band mark...
how to calculate donchian channels
technical analysis in trading evaluates and predicts future price moves and trends for securities one tool employed often is the donchian channel while the mathematical formula behind it is straightforward many online trading platforms and technical analysis apps calculate and plot the donchian channel for you this con...
what do donchian channels tell you
donchian channels depict the relationship between the current price and trading ranges over set periods 2 three values build a visual map of price over time like bollinger bands signaling the extent of bullishness and bearishness for the chosen period the top line shows the extent of bullish energy the highest prices a...
when the price decreases for 20 days from a high the green line will be horizontal and then start dropping conversely when the price rises from a low for 20 days the red line will be horizontal for 20 days and then start rising
practical uses of the donchian channeldonchian channels have several applications for traders in stocks forex commodities and other markets they can help identify potential breakouts and reversals in price which are the moments when traders are called on to make strategic decisions these strategies can help you capital...
when an asset price keeps trading within a narrow range of the donchian channel signaling potential consolidation a breakout could be more likely to occur once the price moves above or below the outer lines
an important use of donchian channels is to determine support and resistance levels the upper band of the channel diagrams the highest price of an asset over a set period which can serve as its resistance level alternatively the lower band marking the lowest price point for the same time provides the support level a br...
how do donchian channels differ from other moving average indicators
donchian channels unlike standard moving average indicators focus on the highest and lowest price points over a set time frame while moving averages give a smoothed average price trend donchian channels create a band enclosing the extreme highs and lows this can be particularly useful for identifying breakout points an...
what is a dormant account
a dormant account is a customer s account at a bank or other financial institution that has seen no activity with the possible exception of interest deposits for a long period of time the owner may have forgotten about the account moved out of town without leaving a forwarding address or died a dormant account with a v...
how a dormant account works
accounts that can be declared dormant include checking and savings accounts brokerage accounts 401 k accounts and pension fund accounts the contents of safety deposit boxes also may be declared unclaimed property the inactive period before an account is declared dormant may be as short as two years an account becomes d...
how can i claim my money from a dormant account
your first step is to contact the bank or other financial institution where you had the account you ll need proper identification and you should have some proof that it s your money such as a bank statement if the bank has deemed the account inactive but has not yet transferred the money to the state the account should...
what is a dotcom
a dotcom or dot com is a company that conducts business primarily through a website a dotcom company embraces the internet as the key component in its business dotcoms get their name from the url or domain name that customers enter to visit a website the com at the end of the url stands for commercial url is an acronym...
how do dotcoms get their name
dotcoms get their name from the uniform resource locator url or domain name that customers enter to visit a website the com at the end of the url stands for commercial
what does a dotcom require
the primary component of the dotcom business model is an internet presence most if not all of a dotcom company s products or services are displayed marketed sold and supported via the internet
what was the dotcom bubble
the dotcom bubble was a rapid rise in u s technology stock equity valuations fueled by investments in internet based companies during a bull market in the late 1990s the value of equity markets grew exponentially during this period the bubble burst in 2001 with equities entering a bear market the bottom linea dotcom is...
what was the dotcom bubble
the dotcom bubble was a rapid rise in u s technology stock equity valuations fueled by investments in internet based companies during the bull market in the late 1990s the value of equity markets grew exponentially during this period with the technology dominated nasdaq index rising from under 1 000 to more than 5 000 ...
how the dotcom bubble burst
the 1990s was a period of rapid technological advancement in many areas but it was the commercialization of the internet that led to the greatest expansion of capital growth the country ever saw although high tech standard bearers such as intel cisco and oracle were driving organic growth in the technology sector it wa...
how long did the dotcom bubble last
the dotcom bubble lasted about two years between 1998 and 2000 the time between 1995 and 1997 is considered to be the pre bubble period when things started to heat up in the industry
why did the dotcom bubble burst
the dotcom bubble burst when capital began to dry up in the years preceding the bubble record low interest rates the adoption of the internet and interest in technology companies allowed capital to flow freely especially to startup companies that had no track record of success valuations rose and money eventually dried...
what caused the dotcom crash
the dotcom crash was triggered by the rise and fall of technology stocks the growth of the internet created a buzz among investors who were quick to pour money into startup companies these companies were able to raise enough money to go public without a business plan product or track record of profits these companies q...
what caused the 2000 stock market crash
the 2000 stock market crash was a direct result of the bursting of the dotcom bubble it popped when a majority of the technology startups that raised money and went public folded when capital went dry the bottom line
what is a double bottom
a double bottom pattern is a classic technical analysis charting formation that represents a major change in trend and a momentum reversal from a prior down move in market trading it describes the drop of a security or index a rebound another drop to the same or similar level as the original drop and finally another re...
what does a double bottom tell you
in technical analysis of financial markets a double bottom is significant in that it suggests an important low or strong level of support has been reached following a down move while the double bottom low remains in place price movement is likely to exhibit a retracement higher and possibly indicate the beginning of a ...
what is the overall interpretation of a double bottom
a double bottom is suggestive of a change in direction higher and possibly the start of a new uptrend to put it in buyers sellers terms the sellers have created a downtrend that came to a low point support which led to a rebound or short covering the rebound that follows is considered corrective within the overall down...
does the double bottom suggest a price target
yes the minimum price target for the formation is the distance from the previous low to the corrective high in the middle of the formation so the target is roughly 10 higher from the initial low gains beyond that level after the second bottom has been reached would be an extremely bullish signal and may confirm a more ...
what is the double declining balance ddb depreciation method
the double declining balance depreciation ddb method also known as the reducing balance method is one of two common methods a business uses to account for the expense of a long lived asset the double declining balance depreciation method is an accelerated depreciation method that counts as an expense more rapidly when ...
what is depreciation
depreciation is an accounting process by which a company allocates an asset s cost throughout its useful life in other words it records how the value of an asset declines over time firms depreciate assets on their financial statements and for tax purposes in order to better match an asset s productivity in use to its c...