When stock splits nothing happens but your shares gets double &price will be half. The company reserves/profit will remain unchanged. Reserves same but face value gets half,easy to trade.
While bonus issue: company has to spare additional stock price from its profits in the form of reserves.
Face value, market capital, stock price,face value remain unchanged. But the reserve captial will be lost.
Dividend stocks:
mature companies pays dividends every year to stock holders. Because of there is no need to reinvestment. Making every year certain profit margin.
10%+margin in india may be a good sign.
Intermediate dividend: within 1 year more than once.
Ex: sbi
Tax free: upto lakh
Based on face value of the share
dividend yield: 10% (invested 100 then 10)(demand increase share price goes up then dividend yield lowers)
dividend payout ratio: 100%= every year.
I bought 1000each share *100 = 1lakh, face value 100
Dividend yield 5%= 5000 no I get 500.
“r % $100 shares at $ P
rate of return in percentage or dividend yield for year.
There is no need to declare dividends every year.
$100 = face value of shares
at $P market value of the share
Ex: shared price: 100, face value 10
Dividend yield 20%
10/20*100=2 rupees per share.
also consider growth of stock price.
Top 10
Vedanta 10.2% , hpcl IOCl, power finance etc.
Stock split:
if face value 10 after split 1:2 ratio (face value becomes 5, Share value before split 100, after split 50 each share , you got quantity but same value. But new people buys because it’s cheaper to buy.
Bonus shares:
instead of dividend, free shares by company profit on face value like 1:2 ratio or 2:1 rato.
Bonus share
1:1( 1share bonus)
1:3 (1bouns share for 3 shares)
1:10
Rights issue (discount shares for existing share holders).
Face value:
company decides while listing (ipo) on the stock exchange.
there is much price difference in face value & stock price
Face value: when promoters invest money at beginning called called equity capital, the equity capital ex: 100k invested, then face value 2 I got shares 50k 50k*2= 100K.
Equity capital/no if outstanding shares
Equity capital= face value* no if shares
//Added by promoters
More than equity capital pay as dividend.
same value until stock split.
When will face value changes?
Only when stock splitting, then it will be half.
Dividend benefits are available on facevalue.
Market value: price goes up& down current market value.(intangible assets like brand, tecnology, patents etc)
Book value: based on financial statements
Tangible assets-liabilites(equity capital)/no of shares.
Equity value+reserves/noof shares
P/b ratio hig
low for manufacturing, high for tech companies.(because of tangible assets)
