How To Learn & Test MOAC
To understand the Compound Return module (aka MOAC) do the following tests:
Create a new Manual Asset and select:
Asset Sub-Type Securities
Quantity 10,000
Price $10
Current Yield 5%
Click Save. You will now have a dividend "stock" asset showing $100,000 in Current Value.
Now test the following scenarios in MOAC:
Annual Appreciation 0%. Yield Growth Rate 0%. Results "Yield" stays the same every year. Reasonable as stock price and dividend per share have no change. Yield should be the same.
Annual Appreciation 5%. Yield Growth Rate 0%. Results "Yield" goes down every year. Reasonable as if stock price goes up and dividend per share has no change. Yield should go down.
Annual Appreciation 2%. Yield Growth Rate 5%. Results "Yield" goes up +3% every year. Reasonable as if dividend per shares goes up faster than stock price. Yield should go up.
Annual Appreciation 5%. Yield Growth Rate 5%. Results "Yield" stay the same every year. Reasonable as stock price and dividend per share increase at the same pace. Yield should be the same.
Annual Appreciation 5%. Yield Growth Rate 2%. Results "Yield" goes down -3% every year. Reasonable as if stock price goes up faster than dividend per share. Yield should go down.
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