Return of capital (ROC) refers to principal payments back to "capital owners" (shareholders, partners, unitholders) that exceed the growth (net income/taxable income) of a business or investment. It should not be confused with Rate of Return (ROR), which measures a gain or loss on an investment. It is essentially a return of some or all of the initial investment, which reduces the basis on that investment. ROC effectively shrinks the firm's equity in the same way that all distributions do. It is a transfer of value from the company to the owner. In an efficient market, the stock's price will fall by an amount equal to the distribution. Most public companies pay out only a percentage of their income as dividends. In some industries it is common to pay ROC. * Real Estate Investment Trusts (REITs) commonly make distributions equal to the sum of their income and the depreciation (capital cost allowance) allowed for in the calculation of that income. The business has the cash to make the distribution because depreciation is a non-cash charge. * Oil and gas royalty trusts also make distributions that include ROC equal to the drawdown in the quantity of their reserves. Again, the cash to find the O&G was spent previously, and current operations are generating excess cash. * Private business can distribute any amount of equity that the owners need personally. * Structured Products (closed ended investment funds) frequently use high distributions, that include returns of capital, as a promotional tool. The retail investors these funds are sold to rarely have the technical knowledge to distinguish income from ROC. * Public business may return capital as a means to increase the debt/equity ratio and increase their leverage (risk profile). When the value of real estate holdings (for example) have increased, the owners may realize some of the increased value immediately by taking a ROC and increasing debt. This may be considered analogous to cash out refinancing of a residential property. * When companies spin off divisions and issue shares of a new, stand-alone business, this distribution is a return of capital. (Wikipedia).
Determine the Total Return of an Investment as Percent
This video explains how to calculate the total return on an investment as a percent. http://mathispower4u.com
From playlist Finance: Simple and Compounded Interest
In this video, we look at a basic return on investment calculation.
From playlist Personal Finance
Annual Rate of Return Need for Loss Recover and Additional Return on Investment
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From playlist Finance: Simple and Compounded Interest
FRM: Time-weighted versus dollar-weighted (IRR) returns
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From playlist FRM
Excel Finance Class 90: Period (Holding) Returns For Stock
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From playlist Finance: Simple and Compounded Interest
Return on Assets (ROA) and Return on Equity (ROE) - Fundamental Analysis
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From playlist Stocks and Bonds
Excel Finance Class 91: Period (Holding) Nominal, Real & Dollar Returns For Coupon Bond
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From playlist Excel Finance Free Course at YouTube. Cash Flow Analysis and Model Building (110 Videos).
Excel Finance Class 101: Average Real Return For A Stock Based On Historical Data
Download Excel File: https://people.highline.edu/mgirvin/YouTubeExcelIsFun/Busn233Ch10.xlsx Download PowerPoints: https://people.highline.edu/mgirvin/YouTubeExcelIsFun/Bsun233Ch10.pptx See how to calculate Average Real Return For A Stock Based On Historical Data.
From playlist Excel Finance Free Course at YouTube. Cash Flow Analysis and Model Building (110 Videos).
Applied Portfolio Management Private Equity | Leveraged Buyouts | Venture Capital
All slides are available on my Patreon page: https://www.patreon.com/PatrickBoyleOnFinance In todays Applied Portfolio Management class we learn about private equity, venture capital, growth capital funds and venture capital. We learn about fund structures, risk and historic returns. So
From playlist Applied Portfolio Management
Capital asset pricing model (CAPM, FRM T1-9)
The CAPM is a ex ante single-factor model where the single-factor is the market's excess return: it says that we should expect an excess return that is proportional to the stock's beta, which is the stock's exposure to market's excess return, as measured by the stock's beta. Beta can be re
From playlist Risk Foundations (FRM Topic 1)
Managerial Accounting by Dr. Varadraj Bapat,Department of Management,IIT Bombay.For more details on NPTEL visit http://nptel.ac.in
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From playlist Courses and Series
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From playlist Investment vehicles, insurance, and retirement | Finance and Capital Markets | Khan Academy
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MIT 14.771 Development Economics, Fall 2021 Instructor: Esther Duflo View the complete course: https://ocw.mit.edu/courses/14-771-development-economics-fall-2021 YouTube Playlist: https://www.youtube.com/playlist?list=PLUl4u3cNGP61kvh3caDts2R6LmkYbmzaG Covers a version of the neoclassi
From playlist MIT 14.771 Development Economics, Fall 2021
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From playlist Performance measures
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From playlist MIT 14.04 Intermediate Microeconomic Theory, Fall 2020
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The CML contains ONLY efficient portfolios (and plots return against volatility; aka, total risk) while the SML plots any portfolio (and plots return against beta; aka, systematic risks) including inefficient portfolios. [here is my xls https://trtl.bz/2Fru70r] 💡 Discuss this video here i
From playlist Risk Foundations (FRM Topic 1)
12. Real Estate Finance and its Vulnerability to Crisis
Financial Markets (ECON 252) Real Estate is the biggest asset class and of great importance for both individuals and institutional investors. An array of economic and psychological factors impact real estate investment decisions and the public has changing ideas of real estate as a prof
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