Duration of FundsThe main difference between closed-ended and open-ended mutual funds is that the closed-ended funds are for a specific duration, while the open-ended funds have no specific duration.The investors in open-ended funds may join and leave the funds anytime they wish.In case of closed-ended funds, the investors must stay ... Read More

There are many similarities between bonus shares and share splits.In both the cases, the total number of outstanding shares goes up.Share split and bonus shares both increase the good future outlook of the shares.A company issuing a bonus share or splitting its shares shows a kind of promise to the ... Read More

We know that a company can raise funds from the capital markets by issuing shares to a number of shareholders. When a company offers the opportunity of investment to a select group of investors, it is known as private placement.Private placement is an alternative to an Initial Public Offering (IPO) ... Read More

Share split is a method of increasing the total outstanding number of shares in the market by decreasing the value of the share in a given proportion.Share split does not alter the total funds. It only decreases the par value of the shares.Share split is a matter of dividing the ... Read More

The efficiency of a capital market is measured by the speed and disclosure of information in the market about the shares. The capital markets of advanced as well as some emerging markets are found to be fairly efficient. However, efficiency does not guarantee the fact that the market is perfect.In ... Read More

Informational Content of DividendsDividend payout by competitive companies usually comes with statements of profitability and future growth. A successful firm uses the information to woo its current and potential investors by using promotional content about the profitability of the shares issued by the company. Thus, there is often a statement ... Read More

What is a Primary Market?There are two forms of securities markets that are differentiated based on the type of issues of securities in them.The primary market is for the new security issuance, while the secondary market is for the purchase and sale of already existing securities.As the primary markets deal ... Read More

Although there are advantages of paying stable dividends over the years to the company’s shareholders, there are some dangers associated with the policy too. As is obvious, dividend payments play an important part in the smooth running of a business and the stability of dividends makes it more critical for ... Read More

Mutual funds pool investments of like-minded investors and invest the cumulative sum in large and diversified investment projects. This helps small investors access big projects which they might not access individually.Advantages of Mutual FundsThere are some distinct benefits of mutual funds such as the following −SimplicityMutual funds are an easy ... Read More

Walter’s model is a dividend theory that considers the internal rate of return (IRR) and cost of capital to derive the valuation of a firm. The internal rate of return and cost of capital remains constant for the entire cycle of calculation. However, according to Walter’s model, the Earnings per ... Read More