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Use the ASX website, Yahoo Finance or other research sites to determine the one

ID: 2382526 • Letter: U

Question

Use the ASX website, Yahoo Finance or other research sites to determine the one year change in share price of the Fortescue Metal Group LTD stock. Use the closing price.

Use the ASX website or annual report to determine the dividend paid for the year. If the share is franked, you will have to gross it up to account for franking credits. If the stock pays dividends in foreign currency, you will have to convert that home currency using the exchange rate of the date of dividend payment.

Most Australian companies pay twice a year: interim and final dividend.

Some companies may pay a special dividend. This should be included in calculating your total one year return.

You can use the All Ordinaries (AORD) as a proxy for the market.

The dates used should match the dates of the 2015 annual report.

Explanation / Answer

From Yahoo Finance

Open Price1.92

Close Price 1.86

% Change = (1.86-1.92)/1.92

                 =-3.125%

Dividend Paid for the year

Interim Dividend = A$0.03 Millions

Final Dividend= A$ 0.02 Millions

Total Dividend = A$0.05 Millions

Fully Franked Dividend Calculation

Franking Credits = (Dividend Amount / (1-Company Tax Rate)) – Dividend Amount

A$0.05 / (1 – 0.30)) – A$0.05

=A$ 0.0214