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Single Factor Dividend Income Model. Part 2. Yo Complexity


I introduced in previous post "Single Factor Dividend Income Model. Part 1." an empirical model for income oriented stock investors.

Obviously income depend on initial yield of stock Yo=D/P, where D is dividend and P is stock price. On the first glance Yo is a simple number and nothing to discuss here.

In this communication I'll describe 1) Yo complexity and 2) how Yo affects DGi safety.

D - look back or forward?

P - visible, opague and hidden factors. Time value of money.

Examples of dividend suspension/cut AFTER announcement: BP after disaster in 2010, Otelco Inc. (OTT) - 4/20/2012