What does 40% Dividend Mean?

Submitted by Deepak Shenoy on 17 March 2011 - 4:31pm
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Mutual Funds in India often declare dividends like "40%" or "20%" - and if it gets you salivating that you're going to get 40% return on your money, you should stop right there and see this video.

Learn about what they mean when they say 40% and why you shouldn't bother. Instead, what matters is a "Dividend Yield" and even that doesn't matter too much (since the NAV falls after the dividend payout).

(4 min)

Comments

Just wanted to point out that

Submitted by Vivek Sharma on 17 March 2011 - 5:29pm.

Just wanted to point out that an assumption here is that the dividend tax rates are 0%. This is the case as of now, however, if and when dividend (and capital gains) tax rates change, high dividend yields may (usually the case) or may not be preferable.

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