The time-weighted rate of return (TWRR) is found by calculating the holding period return (HPR) for each separate sub-period and compounding them.

Sub-period 1 (Jan 1, 2016 – Dec 31, 2016):

• Initial value per share = $60
• End value per share = $75
• Dividend per share = $5
• $HPR_1 = (P_{end} + Div - P_{begin}) / P_{begin} = (75 + 5 - 60) / 60 = 20 / 60 = 33.333\%$

Sub-period 2 (Jan 1, 2017 – Dec 31, 2017):

• Initial value per share = $75
• End value per share = $90
• Dividend per share = $5
• $HPR_2 = (P_{end} + Div - P_{begin}) / P_{begin} = (90 + 5 - 75) / 75 = 20 / 75 = 26.667\%$

Cumulative TWRR: $TWRR_{cumulative} = (1 + 0.33333) \times (1 + 0.26667) - 1 = 1.33333 \times 1.26667 - 1 = 1.6888 - 1 = 68.88\%$

Annualized TWRR: Since the total period spans 2 years, the annualized geometric mean TWRR is: $TWRR_{annual} = \sqrt{(1 + HPR_1) \times (1 + HPR_2)} - 1$ $TWRR_{annual} = \sqrt{1.68889} - 1 = 1.29957 - 1 \approx 29.96\%$

Note: Depending on intermediate rounding techniques used by the original author, 29.94% is the closest to the true annualized TWRR of 29.96%. Often in standard risk tests, annualized figures are expected for multi-year TWRRs.