I have $300,000 to invest.

If I have not invested my money in a property, I would have invested in the share market. In particular, I would have invested the full amount of equity in cash I would otherwise invest in a property in the Vanguard Australian Shares Index ETF (ASX: VAS).

However, I would not have borrowed to buy the investment as it is my view that borrowing to buy shares is too risky for my risk appetite.

Therefore, your report should calculate my:

1. (i) after-tax total return on investment in dollar terms;

2. (ii) after-tax total return on investment %; and

3. (iii) after-tax total return on capital %

from my investment in VAS over the 10 years, rather than a property.

You will need to estimate the annual dividends that may be derived on the VAS investment, as well as the potential growth in value of the investment, over the 10 years based on credible research.

You can make the assumption that all dividends received are fully franked and include in your calculations the tax effect of the franking credits attached to the dividends each financial year .

Hint: To compare apples with apples (equity with equity not equity to capital), you need to take into account the fact that not all of the $300,000 may be invested in the property.

VAS Financial Information:

Day		Year		Ratios
Open	67.820	Previous close	67.530	P/E	312.350
Day high	68.660	52 week high	91.300	EPS	0.216 AUD
Day low	67.780	52 week low	56.280	Annual dividend yield	4.87
Daily volume	89,474	Average volume	473,006
Bid	68.200
Offer	68.240
Number of shares	64,685,612

Annual Dividends:

12/2016	12/2017	12/2018	12/2019	12/2020
3.00	2.93	3.49	3.52	1.39