Don’t invest in something you don’t understand
“ The important thing is to know what you know and know what you don’t know.” — W.B.
### Given:
- **Starting Value (Investment):** €60 (the cost of the "employee").
- **Annual Dividend:** €2.
- **Capital Growth:** 6% per year (equivalent to an annual price increase).
---
### Annual "Yield" per Employee:
1. **Dividend Yield:**
Dividend as a proportion of the starting value:
\[
\text{Dividend Yield} = \frac{\text{Dividend}}{\text{Starting Value}} = \frac{2}{60} = 3.33\% \, \text{per year}.
\]
2. **Capital Growth:**
Price growth per year:
\[
\text{Capital Growth} = \text{Starting Value} \times \text{Growth Rate} = 60 \times 0.06 = 3.60 \, \text{€}.
\]
3. **Total Return per Year:**
\[
\text{Total Return} = \text{Dividend} + \text{Capital Growth} = 2 \, \text{€} + 3.60 \, \text{€} = 5.60 \, \text{€}.
\]
### Relative "Return":
The "employee" brings in €5.60 annually on an investment of €60, which equals a return of about 9.33% per year.
---
### Conclusion:
A Coca-Cola "employee" (stock) generates an annual value of €5.60 through dividends and capital growth, making it a reliable and steadily growing asset.
---
This analysis outlines the combination of dividend income and capital appreciation that an investor can expect from owning a Coca-Cola share, framing it in the metaphor of a "worker" or "employee" providing yearly returns. The total return comes from both dividends and the annual price increase (capital growth).
STATUS CHECK:
Formula
X=COKE
O,5% of X =BTC
1/3 of X = BP
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MIMI$ 500
PEPE$ 20
GBKG1
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CSC 6x
FA60
STB
WB
FIELM.
