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Modelling on Stock Investment Valuation for Long-term Strategy

Received: 11 July 2019     Accepted: 7 August 2019     Published: 23 August 2019
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Abstract

This paper developed long-term investment of stock cash flow activities comprising of how yearly investment contribution turns to share units and vice versa, how the series of dividends pay out are declared and finally, how the growth of share units are generated over the years of investing period. These investment model activities form cash inflows and outflows and hence, in return, the performance of this investment model can be evaluated. In addition, this model also constrained that, the yearly dividends obtained were being reinvested together with the annual contributions in accumulating shares. Besides presenting the computation of purchasing and selling of share units and the amount of dividend obtained, this paper contributed in the computation of the growth of the shares in a year, based on share issuance such as share split or consolidation, as well as bonus share rewards. Based on these activities, the net present value (NPV) was derived and the modified internal rate of return (MIRR) was determined by setting up zero-valued of NPV. We illustrated the computation of MIRR by looking at the investment activity towards Prolexus Berhad from the year 2011 to 2015. The increasing of company share prices through years, the encouraging series of dividend rates and generous of the company in issuing shares to the shareholders, were also clearly figured that determined attractive MIRR.

Published in Journal of Investment and Management (Volume 8, Issue 3)
DOI 10.11648/j.jim.20190803.11
Page(s) 60-66
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Modified Internal Rate of Return (MIRR), Investment Models, Net Present Value (NPV), Share Split, Bonus Issue

References
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Cite This Article
  • APA Style

    Shamsul Rijal Muhammad Sabri, Wajeeh Mustafa Sarsour. (2019). Modelling on Stock Investment Valuation for Long-term Strategy. Journal of Investment and Management, 8(3), 60-66. https://doi.org/10.11648/j.jim.20190803.11

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    ACS Style

    Shamsul Rijal Muhammad Sabri; Wajeeh Mustafa Sarsour. Modelling on Stock Investment Valuation for Long-term Strategy. J. Invest. Manag. 2019, 8(3), 60-66. doi: 10.11648/j.jim.20190803.11

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    AMA Style

    Shamsul Rijal Muhammad Sabri, Wajeeh Mustafa Sarsour. Modelling on Stock Investment Valuation for Long-term Strategy. J Invest Manag. 2019;8(3):60-66. doi: 10.11648/j.jim.20190803.11

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  • @article{10.11648/j.jim.20190803.11,
      author = {Shamsul Rijal Muhammad Sabri and Wajeeh Mustafa Sarsour},
      title = {Modelling on Stock Investment Valuation for Long-term Strategy},
      journal = {Journal of Investment and Management},
      volume = {8},
      number = {3},
      pages = {60-66},
      doi = {10.11648/j.jim.20190803.11},
      url = {https://doi.org/10.11648/j.jim.20190803.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jim.20190803.11},
      abstract = {This paper developed long-term investment of stock cash flow activities comprising of how yearly investment contribution turns to share units and vice versa, how the series of dividends pay out are declared and finally, how the growth of share units are generated over the years of investing period. These investment model activities form cash inflows and outflows and hence, in return, the performance of this investment model can be evaluated. In addition, this model also constrained that, the yearly dividends obtained were being reinvested together with the annual contributions in accumulating shares. Besides presenting the computation of purchasing and selling of share units and the amount of dividend obtained, this paper contributed in the computation of the growth of the shares in a year, based on share issuance such as share split or consolidation, as well as bonus share rewards. Based on these activities, the net present value (NPV) was derived and the modified internal rate of return (MIRR) was determined by setting up zero-valued of NPV. We illustrated the computation of MIRR by looking at the investment activity towards Prolexus Berhad from the year 2011 to 2015. The increasing of company share prices through years, the encouraging series of dividend rates and generous of the company in issuing shares to the shareholders, were also clearly figured that determined attractive MIRR.},
     year = {2019}
    }
    

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  • TY  - JOUR
    T1  - Modelling on Stock Investment Valuation for Long-term Strategy
    AU  - Shamsul Rijal Muhammad Sabri
    AU  - Wajeeh Mustafa Sarsour
    Y1  - 2019/08/23
    PY  - 2019
    N1  - https://doi.org/10.11648/j.jim.20190803.11
    DO  - 10.11648/j.jim.20190803.11
    T2  - Journal of Investment and Management
    JF  - Journal of Investment and Management
    JO  - Journal of Investment and Management
    SP  - 60
    EP  - 66
    PB  - Science Publishing Group
    SN  - 2328-7721
    UR  - https://doi.org/10.11648/j.jim.20190803.11
    AB  - This paper developed long-term investment of stock cash flow activities comprising of how yearly investment contribution turns to share units and vice versa, how the series of dividends pay out are declared and finally, how the growth of share units are generated over the years of investing period. These investment model activities form cash inflows and outflows and hence, in return, the performance of this investment model can be evaluated. In addition, this model also constrained that, the yearly dividends obtained were being reinvested together with the annual contributions in accumulating shares. Besides presenting the computation of purchasing and selling of share units and the amount of dividend obtained, this paper contributed in the computation of the growth of the shares in a year, based on share issuance such as share split or consolidation, as well as bonus share rewards. Based on these activities, the net present value (NPV) was derived and the modified internal rate of return (MIRR) was determined by setting up zero-valued of NPV. We illustrated the computation of MIRR by looking at the investment activity towards Prolexus Berhad from the year 2011 to 2015. The increasing of company share prices through years, the encouraging series of dividend rates and generous of the company in issuing shares to the shareholders, were also clearly figured that determined attractive MIRR.
    VL  - 8
    IS  - 3
    ER  - 

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Author Information
  • School of Mathematical Sciences, Universiti Sains Malaysia, Penang, Malaysia

  • School of Mathematical Sciences, Universiti Sains Malaysia, Penang, Malaysia

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