Probir Banerjee has Published 469 Answers

What is Risk Preference? (Financial Management)

Probir Banerjee

Probir Banerjee

Updated on 17-Sep-2021 09:10:37

Risk Preference is one’s tendency to choose either a risky or less risky option. Usually, economists and finance professionals, and investors apply the concept of risk preference in economics, but the concept can be applied to any decision one makes that involves risk. There are several types of risk preferences, ... Read More

Average Returns and Standard Deviation of Securities

Probir Banerjee

Probir Banerjee

Updated on 17-Sep-2021 09:09:34

In Mathematics, the mean or average return is defined as the average of all the given values. To find the mean, the added sum of all the given values is divided by the total number of values given.Standard deviation (SD), on the other hand, is a measure of the dispersion ... Read More

The Constant Growth Model of Share Valuation

Probir Banerjee

Probir Banerjee

Updated on 17-Sep-2021 09:08:34

The Constant Growth Model is a way of share evaluation. Also known as Gordon Growth Model, it assumes that the dividends paid by the company will continue to go up at a constant growth rate indefinitely. It helps investors determine the fair price to pay for a stock today based ... Read More

Earnings Capitalization Approach for Share Valuation

Probir Banerjee

Probir Banerjee

Updated on 17-Sep-2021 09:06:49

Valuation of SharesValuation of a share means finding the fair value of the share being considered. It is a process of understanding the value of a company’s shares. It indicates whether a share is overvalued or undervalued. The valuation is based on market supply and demand and is based on ... Read More

How to Calculate the Geometric Mean of Return

Probir Banerjee

Probir Banerjee

Updated on 17-Sep-2021 09:05:12

Geometric Mean ReturnThe geometric mean return, also called the geometric average return, is a way to calculate the average compounding rate of return on the investments. It considers the compound interests multiplied by the interest over the number of periods.The geometric mean return is a good measure above the arithmetic ... Read More

What is Holding Period Return?

Probir Banerjee

Probir Banerjee

Updated on 17-Sep-2021 09:03:18

Holding Period Return (HPR) is the return received during the holding period of a portfolio of assets or individual assets. The holding period is the period of time when the stock is kept in one’s possession; that is, it is the time from buying an asset till it gets sold ... Read More

Variance and Standard Deviation

Probir Banerjee

Probir Banerjee

Updated on 17-Sep-2021 09:02:09

The standard deviation (SD) of a dataset is its average amount of variability. It indicates how far each of the data values in a given distribution deviate from the mean, or center, of the distribution. In the case of normal distributions, a larger standard deviation means that the given values ... Read More

What is Portfolio Return?

Probir Banerjee

Probir Banerjee

Updated on 17-Sep-2021 09:01:17

Portfolio Return refers to the loss or gains realized by a portfolio of investment containing several types of investments. Portfolio Return aims to meet the preferred benchmarks, meaning a well-diversified portfolio of stock/bond holdings or a given mix of the two asset classes. Portfolios aim to deliver returns based on ... Read More

Dividend Growth Model (Gordon Growth Model) of Share Valuation

Probir Banerjee

Probir Banerjee

Updated on 17-Sep-2021 08:59:38

The Dividend Discount Model or the Gordon Growth Model is a share valuation method that determines a stock’s intrinsic value. This method does not consider the current market conditions. Investors can compare companies against each other using this simple model. Dividend discount model is called "perpetual growth model" because the ... Read More

What is meant by dividend capitalization?

Probir Banerjee

Probir Banerjee

Updated on 17-Sep-2021 08:58:26

Capitalized Dividends are dividends due on the Preferred Shares which are capitalized by adding them to the Stated price of the Preferred Shares.As most closely held companies do not pay dividends, to determine dividend capitalization, the evaluators must first find out the dividend paying capacity of the business. The Dividend ... Read More

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