Question

Zap Fund is the mainstay of your portfolio. The investment company just announced its​ year-end distributions....

Zap Fund is the mainstay of your portfolio. The investment company just announced its​ year-end distributions. The​ long-term capital gain per share is ​$5.43 and the dividend per share is ​$0.99. Assuming the NAV increased from ​$41.91 to ​$48.69​, during the​ year, calculate your total annual return.

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Answer #1

Total annual return = (Dividend distribution + Capital gains distribution + Change in NAV) / Beginning NAV

Dividend distribution = $0.99

Capital gains distribution = $5.43

Change in NAV = Ending NAV - Beginning NAV

Ending NAV = $48.69

Beginning NAV = $41.91

Therefore

Change in NAV = $48.69 - $41.91

= $6.78

Total annual return = ($0.99 + $5.43 + $6.78) / $41.91

Total annual return = $13.20 / $41.91

Total annual return = 0.3150

or 31.50%

Thus the Total annual return is 31.50%.

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