Total Return (TR) and Total Return for All Shareholders (TRAS). Difference for the Companies in the S&P 100

15 Pages Posted: 18 Jun 2020

Date Written: May 23, 2020

Abstract

The Total Return (TR), also called “return including dividends” and “Total Index Return” provides the theoretical return of a share, assuming that dividends are re-invested to purchase additional shares.

The Total Return for All Shareholders (TRAS) is the return that all the shareholders of a company had in a period. It is also the return of a shareholder that always had a constant proportion (ie. 0,1%) of the shares. It takes into account not only the dividends, but also the share repurchases and the capital increases.

We calculate both returns for the S&P 100 companies in the period December 2004 – April 2020. For 18 companies, annual TR exceeded annual TRAS in more than 1% (i.e. Blackrock 3,9%, Microsoft 2%). For 19 companies, annual TRAS exceeded annual TR in more than 1% (i.e. Citigroup 7,8%, Altria 5,4%).

Most databases provide the Total Return (TR) valid for a shareholder that reinvested 100% of the dividends, did not sell any share in repurchases and did not subscribe any new share when the company increased capital.

Keywords: Total Return, Total Return for All Shareholders, S&P 100, Share Repurchases

JEL Classification: G12, G31, M21

Suggested Citation

Fernandez, Pablo, Total Return (TR) and Total Return for All Shareholders (TRAS). Difference for the Companies in the S&P 100 (May 23, 2020). Available at SSRN: https://ssrn.com/abstract=3608967 or http://dx.doi.org/10.2139/ssrn.3608967

Pablo Fernandez (Contact Author)

IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain
+34 91 357 0809 (Phone)
+34 91 357 2913 (Fax)

HOME PAGE: http://web.iese.edu/PabloFernandez/

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