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Factors Determining Total Returns of Common Stock
The total returns of common stock or the S&P 500 can be determined by five key factors: the change in earnings per share, the change in the multiple (price paid for earnings), dividend yield (if applicable), the growth rate of the top line in dollar terms, and understanding where returns for index investors come from. These factors collectively contribute to the overall investing landscape and play a crucial role in shaping expected returns in the market.