Question

Difference between asset backing method and yield method

Answer 1

Answer:

Aset backing method refers to valuation method which is actually made on the basis of all the assets that the company possesses. All of the shares are actually valued through the basis of the original internal value. When it comes to yield basis method however it is expressed through the basis of percentage.

Answer 2

Answer:

Asset Backing Method:

• The net asset backing method divides the number of shares issued with an entitlement to assets on wind-up by the total net assets, which are the current market worth of all of the company's assets less its total liabilities.

Yield Method:

• The term "yield" describes the profits produced and realized on an investment over a specific time frame.
• It is shown as a percentage depending on the amount invested, the security's current market value, or its face value.
• The interest or dividends a shareholder receives from owning certain security are included in the yield.
• Yields can be categorized as known or expected depending on the security's valuation (fixed vs. variable).

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