how dividend payout and reinvestment will be calculated (formulas) and examples and how fund effects ?

Answer 1

DIVIDEND payout is aclculated by using dividend payout ratio.and reinvestment is decided acc. to the annual profits earned by the company.

funds effect the overall capitalization of the company.

Answer 2

This is what I think you are asking....You go to buy a mutual fund and the financial institution asks you if you want your dividends re-invested? Is that right>?????

Some mutual funds, generate some of interest, dividends, capital gains. You have the option of being sent a cheque on the date of distribution, Usually, interest monthly, dividends every 3 months, capital gains one a year.

Capital gains of a fund are the gain they make on a stock they sold, not the gain you make on the fund because it has gone up in value.

So anyway, you can have a cheque sent to you for these monies, or most people re-invest, which mean, the money that they would of sent you is used to buy more shares of the fund at the value the fund shares are at the date of the distribution of these monies

It affects the price of the fund slightly, except for moneymarket funds that don't change in value and just pay interest every month.

But Funds with dividends tend to drop slightly because of the payout, but you don't lose anything, you either have the same amount of shares + a cheque, or you have mores shares than before.

Answer 3

Guess you are refering to the mutual fund/unit trust fund. Initial investment multiply by ( 1 + 0.08) to the power of no.of years invested assuming the average compounded interest is 8%.