1. If a stock starts the year at $100 and ends the year at $112 and pays a $4 dividend over the year, what is the TRS for that year?

2. True or False For periods of 10 to 15 years or more, it is true that if managers focus on improving TRS to win performance bonuses, then their interests and the interests of shareholders should be aligned.

3. True or False The detrimental result of the expectations treadmill is that, for firms that have had superior operating and TRS performance, the managers who try to continually meet the higher expectations may engage in detrimental activities such as ill-advised acquisitions or value destroying new ventures.

4. A company should measure management performance in terms of the companys performance, not its share price. What are the three areas where managers should focus their energy?

5. Why is it better to measure performance relative to your peers in the same industry?