INVESTMENT JARGONS AND WHAT THEY MEAN (PART 4) RETURN
A return, also known as a financial return, is the money made or lost on an investment over some period of time. For example The return earned during a one-month period is known as monthly return and if the return is for a year, it is an annual return.
Year-on-year (YoY) return, calculates the price change from today to that of the same date one year ago.
Annual percentage rate of return on capital. The dividend or interest paid by a company expressed as a percentage of the current price.
1. Dividend yield = Dividends per Share / Stock Price x 100 Kwesi bought shares of CAL bank at a price of GHS 0.77 per share and received a dividend of GHS 0.10 per share. The dividend yield of the CAL bank shares Kwesi bought will be (0.10/0.77) * 100 = 12.99%
2. Interest yield = Coupon / Bond Price x 100
Yaa bought a government of Ghana bond that has a coupon of 17.5% and can be bought at GHS 1,009.8.
The interest yield will be
(17.5/1009.8)*100 = 1.73%