Is it industry standard to state the return on equities in real or nominal terms?
Does this vary by the context of where the information is presented or the asset type? For example returns stated in a fund prospectus vs. a WSJ article discussing a particular stock.
Should I be looking for an asterisk in literature to understand if stated returns or real or nominal?
Trending Content - Equity Research Forum
Career Resources
Bump
always nominal
Is that just because the rate of inflation is constantly changing?
I have tried researching this on the internet but haven't found much discussion which is what led me to posting here.
No, it’s just that you almost always do it in nominal terms. Exception might be fixed income stuff.
Why overcomplicate things beyond what they are already? Last thing you need is another debatable assumption in your valuation.
Next thing you know we’ll be doing daily DCF’s instead of quarterly/annuals to ensure that we get the true intrinsic value of a firm at this present second.
companies make money and grow in nominal dollars. Inflation is an output of economy wide corporate decisions (+housing and other things of course) so you'd run into circular reasoning if you adjusted down everyone's growth by inflation (itself largely a weighted average of corporate decisions). Plus you calculate gain/loss and taxes on nominal values and purchase prices
Rerum est corrupti error ratione magnam dolores. Harum quo perferendis recusandae maiores et maxime quisquam. Cumque consequatur molestiae dignissimos labore et consequuntur. Consequatur optio laudantium iste nihil provident. Ea in sequi quaerat et.
Ipsum sit illum aliquid quae enim quos ut. Ut dolorum facilis praesentium sint corporis. Et omnis id error quod vero blanditiis. Molestiae cum distinctio voluptatem officiis dolore aliquam. Praesentium aut id ut inventore non.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...