In: Finance
Given the following, how to calculate the total accumulated return time t = 0 on a share, brought to time t = -3,4 i.e. incl. reinvestment in new shares from possible dividends?
Time | Dividend | Price pr share | Realized return |
-3,4 | 0 | 243 | |
-3 | 9 | 234 | 0 |
-2,3 | 0 | 249 | 0,064102564 |
-2 | 9 | 255 | 0,060240964 |
-1,5 | 0 | 270 | 0,058823529 |
-1 | 5 | 248 | -0,062962963 |
-0,4 | 0 | 273 | 0,100806452 |
0 | 8 | 267 | 0,007326007 |
Total return | 0,228336553 |
Time | Dividend | Price per share | New shares bought |
A | B | C = A / B | |
-3,4 | 0 | 243 | - |
-3 | 9 | 234 | 0.0385 |
-2,3 | 0 | 249 | - |
-2 | 9 | 255 | 0.0353 |
-1,5 | 0 | 270 | - |
-1 | 5 | 248 | 0.0202 |
-0,4 | 0 | 273 | - |
0 | 8 | 267 | 0.0300 |
Total | 0.1239 |
Making use of the dividends, an additional 0.1239 shares can be bought.
Investment to buy one share at the beginning = 243
Value of investment at the end = (1 + 0.1239) x 267 = 300.08
Hence, the total accumulated return time t = 0 on a share, brought to time t = -3,4 i.e. incl. reinvestment in new shares from possible dividends = 300.08 - 243 = $ 57.08 (in $ terms) or = 57.08 / 243 = 23.49% (in %age terms)