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Que – H Co’s share price is $3.50 at the end of 20X1 and this includes a capital gain of $0.75 since the beginning of the period. A dividend of $0.25 has been paid for 20X1.
What is the shareholder return (to 1 dp)?
My answer – (P1-p0+D1)/P0
=(2.75-0.75+0.25)/0.75
Can you please tell me where I am getting wrong here ?The share price at then end of the period is $3.50, and therefore the share price at the start of the period was 3.50 – 0.75 = $2.75
The return over the period is 0.75 + 0.25 = $1.00
Therefore the shareholder return is 1.00 / 2.75 = 36.4%
Have you watched my free lectures on this? 🙂
Oh Got it now.
Yeah I have watched it , I just got confused in capital gain treatment.
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