Simple rate of return

(redirected from Unadjusted Return)

Simple rate of return

The return from investments figured by dividing income plus capital gains by the amount of capital invested. The effect of compounding is not taken into account.

Simple Rate of Return

An estimate of the return on an investment. It is calculated simply by finding the investment's profit before taxes and interest expenses. The simple rate of return is easy to calculate but is not always accurate because it considers the investment's profit rather than cash flow. It also does not take into account the effects of compounding. It is also called the accounting rate of return or the book value method.
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For a given sample firm in the inclusion and deletion samples, the unadjusted return is the raw cost of equity measured over the window.
The unadjusted return is calculated as the closing price on the first day of listing less the offer price, as a percentage of the offer price.
The market adjusted return is the unadjusted return less the return on the market index between the day that the offer price is set and the day of listing.
Delta Dental's unadjusted return on revenue in the last three years has been declining and is in the 25-75 basis point area.
Table 3 provides the cross-section/time series results for three measures of return - unadjusted returns (U), returns adjusted by the Sharpe Index (S), and returns adjusted by the Treynor Index (T).
Unadjusted returns do not reflect sales charges and would be lower if they did.