Capital gains is the increase in the value of asset (higher than the purchase price). Capital gains is calculated when the asset has been sold .Return is a part of income which is taxable. A capital loss is occurred when the value of an asset when sold is below its purchase price.
Dividend is decided by the management to be issued to its shareholders. It is expressed as a percentage of the current market price of the asset.
Total shareholder Return =(P1-P0)/P0 + D1/P0
P0 is the purchase price of the asset
P1 is the price at which asset is sold
D1 is the dividend issued by the company’s board
Stock of a Company ABC was purchased at a price of Rs 70 per share by MrX and its market price at which he sold the stock was Rs 75per share . The company also issued an annual dividend of Rf15 .Calculate the total share holder return ?