But you're compounding the 2.5% only with itself. If you had reinvested the divi... | Hacker News

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		jeffshek on Oct 22, 2016 \| parent \| context \| favorite \| on: Microsoft Shares Soar to Record on Earnings Boost ... But you're compounding the 2.5% only with itself. If you had reinvested the dividend back into the stock (common), the return is higher than 48.5%.

pesenti on Oct 22, 2016 [–]

No. 1.025^16=1.48 - that's the reinvestment scenario. What you describe, no reinvestment, is just 2.5%*16=40%.

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