Welcome aboard the stock market roller coaster! 🎢 Buckle up as we delve into the delicious concoction known as the Price-Dividend Ratio (PDR). If you ever wondered if a stock is worth its salt, then PDR might just be the secret sauce you’re looking for! 🍔
The Mystery of PDR Unveiled 🌟
The Price-Dividend Ratio (PDR), or as finance geeks affectionately call it, the P/D Ratio, is calculated like this:
the current market price of a company’s stock divided by its dividend per share for the previous year. Voilà!
Think of it as your investment’s trusty lighthouse guiding you through stormy market waters.
Formula to Impress Your Friends 🤓
Hey, we know you love formulas! Show off with this simple equation:
PDR = \frac{Price per Share}{Dividend per Share}
Now go drop that math bomb in your next social gathering!
PDR in Action 🏃♂️
Imagine you have a stock priced at $100 (Price per Share). Last year, it paid dividends of $5 per share (Dividend per Share). Your PDR would be:
PDR = \frac{100}{5} = 20
So, what does this mystical number 20 tell you? It means for every dollar you want to earn in dividends, you’re willing to pay 20 dollars! Whoa there, Mr. Billionaire!
Why Should You Care? 🤔
Because PDR is like the Buzz Lightyear guiding you to
