Lucas Clinics last dividend (Do) was $1.50. Its current equilibrium stock price is $15.75, and its expected

Question:

Lucas Clinic’s last (Do) was $1.50. Its current equilibrium stock price is $15.75, and its expected growth rate is a constant 5 percent. If the stockholders’ required rate of return is 15 percent, what is the expected yield and expected capital gains yield for the coming year?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...