A Comparison of Value and Growth Strategies at the Nairobi Stock Exchange.
Abstract
When people invest in common stocks they give up current consumption in hope of attaining
increased future consumption. They expect to collect dividends and eventually sell the stock at a
profit. A common stock is a type of security, which represents a commitment on the part of a
corporation to pay periodically whatever its board of directors deems appropriate as cash
dividend. Although the amount of cash dividend to be paid during the next year is subject to
some uncertainty, it is generally relatively easy to accurately predict. However, the amount for
which a stock can be bought or sold varies considerably, making the rumual return difficult to
accurately predict. This means that investors buy stock because they expect an increase in their
wealth; this increase in their wealth has two components -that is, the dividend received and the I
increase in the value of the stock (capital gain). The percentage change in the investor's wealth
from the beginning to the end of a period is known as the rate of return or simply the return....................................................................
Publisher
University of Nairobi