Definition of Stock Return

Definition of Stock Return
Returns for shareholders can be in the form of cash dividends or changes in stock prices. Influence of financial ratios on stock returns, Returns can be realized returns or are called actual returns and expected returns. Realized return is a return that has occurred. This return is calculated based on historical data. Realized return is important, because it is used as a measure of company performance and is also useful as a basis for determining future expectations and risks. Expected return is the return that is expected to be obtained by investors in the future. In contrast to the realization of returns that are already happening.

According to Hartono (2008: 109) stock returns are the results obtained from investments. Return on investment depends on the investment instrument. There are guarantees of return that will be received, for example, certification of deposits in banks that provide interest of a certain percentage that is positive, and bonds promising interest coupons that are paid periodically, or all at once and surely, do not depend on company finances. Another thing with stocks, stocks do not promise a definite return to investors. However, there are several components of stock returns that allow investors to earn dividends, bonus shares and capital gains.

Return has 2 components, namely current inncome and capital gain. The form of current income is the benefits obtained through periodic payments, such as profits in the form of dividends which are a form of the company's fundamental performance. While capital gains in the form of profits received due to the difference in the purchase price of the investment instrument unit. The amount of capital gain will be positive if the selling price of shares owned is higher than the purchase price. Factors that influence the return of an investment include, internal factors such as the quality and reputation of its management, its capital structure, the company's debt structure. External factors such as the influence of fiscal and monetary policy.

Capital Market Benefits
The benefits of the capital market are divided into two, namely the benefits that are intended for issuers and for investors when the primary market is finished. 2. There is no convenant so that management can be more free in managing company funds. 3. High company solvency so as to improve company image. 4. The issuer's dependence on banks is smaller. The capital market for investors has several benefits, namely: 1. The value of investment develops following economic growth, which is reflected in rising stock prices. 2. Obtain dividends for those who own or hold shares and floating interest for bondholders. 3. Can simultaneously invest in several instruments that reduce risk.

Definition of Stock Return according to the expert
Stock returns can be divided into two, namely actual stock returns (expected returns) and expected returns or expected returns. Return is actually a return that has occurred calculated from the difference in current prices relative to previous prices. While the expected return is the return that is expected to be obtained by investors in the future.
The return has two components, namely current income and capital gain (Wahyudi, 2003). The form of current income is in the form of profits obtained through periodic payments in the form of dividends as a result of the company's fundamental performance. While capital gains in the form of profits received because of the difference between the selling price and the purchase price of shares. The amount of capital gains of a stock will be positive, if the selling price of shares owned is higher than the purchase price.

According Jogiyanto (2003: 109) shares are divided into two: (1) return reaisation is a return that has occurred, (2) expectation return is a return that is expected to be obtained by investors in the future. Based on the definition of return, that the return of a stock is the same as the results obtained from investment by calculating the difference in current period stock prices with the previous period by ignoring dividends, then the formula can be written (Ross et al., 2003: 238).
According to Brigham et al (1999: 192), stated Stock Return is: "meansure the financial performance of an investment." In this study, return is used on an investment to measure the financial results of a company.
According to Home and Wachoviz (1998: 26) stated that Stock Return is: "return as benefit which is related to the owner that includes cash dividend last year which is paid, together with market cost appreciation or capital gain when it is realized in the end of the year ".
According to Jones (2000: 124) argues that Stock Return is: "return is yield and capital gain (lost)". (1) Yield, i.e. cash flow paid periodically to shareholders (in the form of dividends), (2) Capital Gain (loss), which is the difference between the share price at the time of purchase and the stock price at the time of sale.
According to Corrado and Jodan (2000: 5) states that Stock Return is: "return from investment security is cash flow and capital gain / loss". Based on the opinions that have been stated, it can be concluded that stock returns are the profits obtained from the ownership of investors' shares on investments made, which consists of dividends and capital gains / losses.

Share Return Classification
Return has a very significant role in determining the value of a stock. Returns can be classified into two, namely realized realized returns and expected return expectations. Realized returns are used as a basis for determining expected return by investors in the future. Realized returns are measured using total returns, relative returns, cumulative returns, and adjusted returns. Total return is the overall return of an investment in a certain period consisting of capital gains and yields Jogiyanto, 2008: 195. Returns consisting of capital gains and yields can be formulated as follows Jogiyanto, 2008: 198: Capital gains are the difference between current investment prices relative to past period prices: Note: P t = Current period stock prices P t-1 = Previous period stock prices Yield is a percentage of periodic cash receipts to the investment price of a certain period of an investment, and for ordinary shares where a periodic payment of D t rupiah per sheet, the yield can be written as follows: Note: D t = Cash dividends paid P t-1 = Share price of the previous period So that the total return can be formulated as follows: Note: P t = Current period stock price P t-1 = Share price of the previous period D t = Cash dividends paid Remembering not always a company distributes cash dividends periodically to its shareholders , then stock returns can be calculated as follows: Note: P t = Current period stock prices P t-1 = Share price of the previous period.