Tuesday, June 30, 2009

334% in Annual Yield

A Swedish share of the investment 5 000 SEK during 1950's and 58 years later, in 2008 gave:
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the shares a dividend of 167 000 SEK. Is it possible?
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I do not know. This is something I have heard when Gunnar Ek from Aktiespararna (Swedish Shoreholders association) talked about dividend growth.

The facts he talks about:

* saved 5 000 SEK in the 50's.
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* Shares issued a dividend of 167 000 SEK in 2008

I have tried to calculate the annual dividend growth:

* To make it as right as possible given I have assumed from the 1950 to 2008, equal to 58 years.
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* I expected a yield of 5% on 1950's. A dividend equal 250 SEK.
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Dividend Growth over 58 years is equal to:
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* About 12% annual dividend growth over 58 years.
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* A yield of 334% as you get each year.
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* 66 800% of the total dividend growth.
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Dividend Growth and distribution in 20-25 years will be almost equal to the amount you have invested. In other words, 100percent 25yers. And truthfully it sounds too good to be true but I am happy just with 40percent 20years.

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