How do you find the Total Shareholder Return for a company? If you know how, would...

How do you find the Total Shareholder Return for a company? If you know how, would you be able to help me figure it out for Microsoft in 2016?

Expert Solution

Total shareholder return or return on equity can be calculated using the following formula:

Return on equity = Net Income/ Average Shareholder’s equity

For the Microsoft Corporation, we have following data for the year 2016:

Net income = $ 16,798,000,000

Beginning shareholder’s equity = 9,43,89,000,000

Ending shareholder’s equity = 12,14,71,000,000

Average shareholder’s equity = (94,389,000,000 + 121,471,000,000)/2

= $107,930,000,000

Return on equity = $ 16,798,000,000 / $107,930,000,000

= 15.56%

jeff jeffy answered 2 years ago

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