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for part a) 3rd objective of total shareholder return, we need dividend per share and share price.
i calculated share price using 12% cost of equity by doing : 0.425/12%= 3.54 SP for 2014. i did this because it said the Cost of equity is 12% PER YEAR assuming no growth. but they have calculated Share price using MV.
i understand the MV method but why can’t we calculate it using cost of equity?Where are you finding this question? I ask because I have the original exam question and answer, and it does not ask about the total shareholder return. This makes me wonder if you are looking at an amended version of the question in one of the Revision Kits.
(Without seeing the question that you are looking at, it could be to do with the definition of ‘total shareholder return’ which is explained in Chapter 2 of our free lecture notes and the lecture working through this chapter.)
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