How to calculate equity reinvestment rate
Calculating reinvested interest depends on the reinvested interest rate. Reinvested coupon payments may account for up to 80% of a bond’s return to an investor. The exact amount depends on the interest rate earned by the reinvested payments and the time period until the bond’s maturity date. Let us assume the Net Income of Amazon in the year 2000 was $100,000 and capital expenditures were around $70,000. So, the reinvestment rate for Amazon for the year 200 will be Capital Expenditure / Net Income i.e. 70,000 / 100,000 = 70%. It means that Amazon was reinvesting 70% of its profits in the business.