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Hello John,
Please help we with the following question.
TKQ Co has just paid a dividend of 21 cents per share and its share price one year ago was
$3.10 per share. The total shareholder return for the year was 19.7%.
What is the current share price (to two decimal places)?1. The answer is $3.50
2. Could you please explain how to obtain the answer?
3. In addition, why the solution is not D/KE?Thanks
The total shareholder return is calculated over one year and is the dividend received plus the change in the market value, as a percentage of the market value at the start of the year.
This is explained (with examples) in Chapter 2 of my free lecture notes and the free lectures working through that chapter.
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