What is the rate of return of the shareholder

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Question: Use the following formula to answer problems on shareholder returns, where Pt is the share price at time t, and Dt is the dividend paid at time t.

Shareholder Return = D2 + P2 - P1
                             P1       P1

Emaline Returns. If the share price of Emaline, a New Orleans-based shipping firm, rises from $12 to $15 over a one-year period, what is the rate of return to the shareholder given each of the following:

a. The company paid no dividends

b. The company paid a dividend of $1 per share

c. The company paid the dividend and the total return to the shareholder is separated into the dividend yield and the capital gain

Reference no: EM131676437

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