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ACCA Strategic Professional · Advanced Financial Management · Financial strategy formulation

Zeta plc's share price was $4.00 at the start of the year and $4.40 at the end. It paid a dividend of $0.20 per share during the year. What was the total shareholder return (TSR) for the year?

Total shareholder return is 15%. The capital gain of $0.40 plus the $0.20 dividend gives $0.60, divided by the opening price of $4.00. Quoting only the share price rise would understate the return at 10%.

  1. A10%
  2. B5%
  3. C15%Correct
  4. D4.5%

Explanation

Capital gain = 4.40 - 4.00 = 0.40. Add dividend 0.20 to give 0.60. TSR = 0.60 / 4.00 = 15%. Using only capital gain gives 10%, and only dividend gives 5%.

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