Shareholder Value Analysis measures the total return on which of the following?

• A. Total return on both dividends and share price growth
• B. Net present value of future cash flows
• C. Earnings per share
• D. Return on investment

Answer: (A)

Shareholder Value Analysis measures the total return to owners from both cash dividends and the increase in share price. It captures the wealth created for shareholders by combining the income received (dividends) with capital gains (price growth) over a period, reflecting what investors actually earn from holding the stock. This differs from other concepts: net present value focuses on a specific investment’s cash flows, earnings per share is an accounting profitability metric per share, and return on investment assesses efficiency without capturing ongoing market price changes or dividend income.