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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Current share price
If a dividend of 15cents per share has just been paid out and the share price one year ago was $3/share and the shareholder return for the year was 25%, what is the current share price.
As usual BPP have not clearly explained how they got the answer $3.60. I asked chat GPT and it gave me $3.90 as the answer using the following method:
current share price “x” = (share price 1 yr ago x (1+s/h return)) + dividend
x = ($3 x 1.25)+$0.15
x=£3.90
It looks as though BPP are subtracting the dividend paid so that x=($3×1.25)-$0.15 = $3.60.
Is that correct?
Monetary value of return = $3 x 1·25 = $3·75
Current share price = $3·75 – $0·15 = $3·60
The share price $3 is a year ago
The dividend has just been paid out so need’s deducting
Thank you