ACCA FM · Chapter 1 · Question 6 of 10
An investor bought shares in a company for $4.00 each one year ago. During the year a dividend of $0.20 per share was paid, and the share price is now $4.60. What was the total shareholder return for the year?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) 20.0%
Explanation
Total shareholder return = (capital gain + dividend) / opening share price = ((4.60 - 4.00) + 0.20) / 4.00 = 0.80 / 4.00 = 20.0% (rounded to 1 decimal place). Using only the capital gain gives 15.0%, using only the dividend yield gives 5.0%, and dividing by the closing price instead of the opening price gives 17.4%.
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