Purchase a stock that pays a dividend to their shareholders

Reference no: EM131066607

People over the decades often wonder about how to successfully mange their investments. The purpose of this paper is to answer the question if it is better to purchase a stock that pays a dividend to their shareholders (value stocks) or buy a stock that pays no dividends and simply reinvests money back into the company (growth stock).

Our parameters are as follows: We take $1000 investment into each company to better see a profit or loss margin Use 1 year ago prices for use of the individual investors that are penetrating the market in 2007. Take 8-16-06 prices and compare them to 8-16-07 prices Take "like companies" within the same business identification class We have selected 4 technology companies (2 value & 2 growth) We have also selected 2 service companies (1 value & 1 growth) Technology:

Value: 8-16-06 price Shares Dividends Value Today MSFT $26.74 37.39716 .76 $1032.91 IBM $81.30 12.30012 2.4 $1330.38 Original Investment: $2000 Today's value: $2330.38 Profit: $330.38 GOOG $285.65 3.500788 NO $1684.68 ORCL $13.30 75.18797 NO $1419.54 Original Investment: $2000 Today's value: 3104.23 Profit: $1104.23 Services: THI $24.81 40.30633 .314 $1289.96 Original Investment: $1000 Today's value: $1289.96 Profit: $289.96 SBUX $30.64 32.63708 NO $857.70 Original Investment: $1000 Today's value: $857.70 Loss: <-$142.30> Null Hypothesis: Ho: average loss/gain of value stock = Average loss/gain of Growth stock H1: Average loss/gain of value stock <>Average loss/gain of Growth Stock

Reference no: EM131066607

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