Let's think a moment about the value of an investment. First we have to look at the ways an Investment can bring us the desired return. There are two ways; cash flow and capital appreciation One example of this is real estate. I can buy a house for investment. I can decide how I want the return from this investment - rent would give me cash flow and selling the home for more than I paid for it would give me capital appreciation. If I decide that renting takes too much time, effort and risk to the asset I may decide to just fix the house up and flip it - this is a pure capital appreciation investment. On the other hand if the market is soft for reselling I may be stuck with holding and renting my property so at least I get a cash flow from my investment Company stocks are the same as this - just replace dividends for rent. The formula to keep in mind here is the following R=[D1 + (P1-PO)YPO. In English this roads Return equals Dividend at end of period 1(01) plus the difference between the price at period 1 minus original purchase price divided by the original purchase price Choose the stock for a particular company and explain to me why you believe it is a good or bad investment using rationale from Chapter 8 reading