# MWR & TWR question (dividend confusion)

http://i.imgur.com/pe0gJVp.png

Can someone break down the process for allocating the divdiends payments for both methods as I am still confused

thanks

In a MWR you literally just use the cash flow function of your calculator.

For the TWR, you are calculating the return for each year individually and turning that into a holding period return. via the formula.

In the former the 10 dollars in dividends is added to the second cash flow. In the latter, it is baked into the year 2 return number.

I I’m still getting wrong answers in the treatment if dividends. Every question seems to contradict the next when comparing where to put the dividend’s on the time line and how many to include. Sometimes it’s says oer share but the answer does reflect this.

give us another question

So youre confused about the amount of the dividend to include? Remember, for MWR the no. of shares actually matter (because youre seeing how much actual dollars are going in and out of the account). When calculating the TWR youre only worried about the dividend amount and price per share at any given time (you dont have to multiply those amounts with no. of shares). Which is why divdends were \$10 for MWR and \$5 for TWR. As to your confusion on the timing of the divs, i thought the question did a good job clarifying that *shrugs*

Looking for a second opinion on my explanation. Hope this helps.