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Sir, Kindly help me with the solution to this problem:
TKQ Co has just paid a dividend of 21c per share and its share price is $3·50 per share. One year ago its share price
was $3·10 per share.
Working to one decimal place, what is the total shareholder return over the period?
A 17·4%
B 18·2%
C 18·9%
D 19·7%Thank you
Over the period, there has been a dividend of 21c and an increase in share price of 40c, giving a total of 61c.
So the total shareholder return is 61 / 310 = 19.7% (D)
The question says that the MV was $3.10 at the start of the year!!
Have a look at page 18 of our free lecture notes for a full explanation.
Maybe a little bit of a picky detail but;
Should the profit/loss in share price during the year not be seen as “unrealized P/L” instead of recognized return?
In the end the return only becomes “realized” once the shares are sold correct?
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