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I'm having difficulty figuring what is the best/most accurate way of calculating returns on an investment that features a drip. That this series of payments as an example (assuming the stock is $10 and the price magically never changes):

Jan 1 - Buy 1000 shares for $10,000 (-10000)

Feb 1 - Dividend, $99 total (+99)

Feb 1 - Re-invest $90 (-90) ($9 left in cash)

Mar 1 - Dividend, $99 (+99)

Mar 1 - Re-invest, $90 (-90) ($9 left in cash)

Apr 1 - Dividend, $99 (+99)

Apr 1- Re-invest, $90 (-90) ($9 left in cash)

Apr 15 - Sell all 1027 shares for $10,270

Which is correct?

a. The annual percentage yield of 10.72% (as calculated using XIRR in Excel).

b. ROI/ROR as calculated: (sum of returns - sum of outlays) / (sum of outlays), in this case: (10567 - 10270) / 10270 = 2.89%

c. ROI/ROR as calculated: (final total cash value - initial investment) / (initial investment): (10297 - 10000) / 10000 = 2.97%

d. ROI/ROR as calculated: (final total cash value - initial investment - additional investments) / (initial investment - additional investments): (10297 - 10000 - 270) / 10270 = 0.26%

I'm not sure what the most accurate measure is (barring the time value of money with the APY calculation). On one hand, I only paid $10,000 to purchase the stock (option C), but on the other hand additional shares were purchased (option D). I'm not sure why option B wouldn't be correct.

p.s. I love Excel.