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FastLearner Fury Holdings Brutally Clever Empire	Posted - 2007.10.08 04:53:00 - [1] In Fury Holdings reports I express dividends paid as a percentage of the NAV at the beginning of the week - that means it represents the percentage return the shareholders got on their investment in the company that week. NAV for the following week is then calculated and reported. Fury Holdings gross profits are spread between three different destinations: 50% go to me as salary, 25% are dividended and the other 25% are reinvested. This means that the NAV of the company rises each week. Expressing dividends as a percentage of initial share price would: a) Be fairly meaningless b) Have to be tailored to different investors - as shares were sold in 3 or 4 (can't remember which) batches at different prices (Current NAV + 4% for all but the first batch). If a company dividends/takes as salary all profits - and hence has no change in NAV - then the dividended percentage is the same whether calculated based on NAV or on issue price.
FastLearner Fury Holdings Brutally Clever Empire	Posted - 2007.10.08 06:07:00 - [2] Originally by: Motivated Prophet Perhaps I'm just not grasping it, but isn't the difference quite academic? We're all going to dividend based on NAV, anyway (otherwise we're more like bonds than stock), but expressing that dividend as a percentage relative to (NAV\|\|stock value\|\|the price of trit in China) is just a convenient service we provide. If you bought in at a different price, then the percentages won't be correct for you. YMMV, IANAL, PPINAIOFR, and all the other standard disclaimers, but it seems simplest to use par value for reporting dividend percentages, so an investor can know his/her multiple (bought a 1k isk stock at 1.5k? Divide reported percentages by 1.5) and it stays constant through multiple reporting periods. MP : Yes, I know, I just made anyone who has ever invested in an x/share/period-dividending RL corporation's head explode, but those don't really exist in Eve, at least at the moment. I don't think the difference IS just academic. Ultimately, the earnings you make on a share are a key part of determining whether to stay invested in that company. Your earnings on a share are equal to the growth of the share's value + the amount you receive in dividends. The key figure you're looking for is earnings + growth expressed as a percentage of the realisable value of the share. To form any sort of meaningful view on the profitability/desirability of a share you need to have dividends expressed as a percentage of NAV or (if the share is traded) as a percentage of the price at which the share trades. If the realisable value of a shares is set by a buy-back based on NAV then reporting dividends based on NAV is clearly the correct option. If all profits are dividended or taken as salary then it makes no difference - as both values are the same. If the realisable of a share is set by market prices, then it becomes debatable - as the most useful value to an investor is neither. Reporting dividends as a percentage of NAV is a direct measure of how what profitability a company makes as a percentage of assets held. Reporting it as a percentage of issue price tells nothing. Think of it in terms of a player who does trading in Jita. He starts the week with 100 million and makes 5 million profit. WHich do you think would be the more useful value? That he made 5% profit that week on the 100 million he started the week with? That he made 100,000% profit on the 5000 ISK he started the game with? That's roughly the difference between the two methods of reporting.

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