A method for comparing returns on taxable corporate bonds and tax-free municipal bonds to determine the higher after-tax return. This helps investors make more informed choices considering their tax brackets.
A measure of the income and capital gains an investor retains after accounting for inflation and taxes.
A cash dividend is a distribution of a portion of a company’s earnings to its shareholders in the form of cash rather than additional shares. These dividends are paid net of income tax, and shareholders typically receive credit for the tax deducted.
Current yield is the annual interest on an investment divided by its market price, providing a snapshot of the bond’s rate of return relative to its current price rather than its face value or yield to maturity.
Discount yield is a method to calculate the annualized yield on a security sold at a discount, such as U.S. Treasury bills. It provides an approximation of the return on investment based on the difference between the purchase price and the face value of the security.
A key metric used by investors to evaluate the income generated by an investment relative to its share price, providing insights into the return on investment from dividends.
A financial ratio indicating the ability of a company to pay dividends to its ordinary shareholders out of its distributable profits. A higher ratio suggests stronger dividend-paying capacity and financial health.
Money paid, usually once a year, to policyholders with participating policies. Dividend rates are based on the insurance company's mortality experience, administrative expenses, and investment returns. Policyholders may choose to take these dividends in cash or may purchase additional life insurance.
Investment appraisal, also known as capital budgeting, involves evaluating the financial viability of a potential investment or project. It assesses whether the investment will yield adequate returns to justify the initial outlay.
The market-risk premium is the additional return over a risk-free rate demanded by investors to compensate for the risk of holding a market portfolio instead of risk-free assets.
Net yield is the return on an investment after all expenses, taxes, and costs have been subtracted. It provides a more accurate measure of an investment's profitability than gross yield.
