You are considering purchasing shares of Microsap's stock. These shares just paid a dividend of $2.00 per

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You are considering purchasing shares of Microsap's stock. These shares just paid a dividend of $2.00 per share, and dividends are expected to grow at a rate of 15 percent per year for the next three years, after which the growth rate is expected to fall off to a constant 8 percent per year thereafter. If the required rate of return for this stock is 14 percent, what would your expected capital gains yield be if you bought the stock today with the intention of selling it one year from now?

a. 7.52%

b. 8.00%

c. 8.66%

d. 15.00%

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