The Unilever annual review stated: Total Shareholder Return (TSR) is a concept used to compare the performance
Question:
The Unilever annual review stated:
Total Shareholder Return (TSR) is a concept used to compare the performance of different com-panies’ stocks and shares over time. It combines share price appreciation and dividends paid to show the total return to the shareholder. The absolute size of the TSR will vary with stock markets, but the relative position is a reflection of the market perception of overall performance relative to a reference group. The Company calculates the TSR over a three-year rolling period . . Unilever has set itself a TSR target in the top third of a reference group of 21 . companies.
Discuss (a) why a three-year rolling period has been chosen, and (b) the criteria you consider appropriate for selecting the reference group of companies.
Step by Step Answer:
a It is because it can reflect the performance of U...View the full answer
Financial Accounting And Reporting
ISBN: 9781292255996
19th Edition
Authors: Barry Elliott, Jamie Elliott
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Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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