Question
1.) A fast growing company, Chuckanut Corp. expects to offer an impressive dividend growth rate at 8% per year for the next 2 years and
1.)
A fast growing company, Chuckanut Corp. expects to offer an impressive dividend growth rate at 8% per year for the next 2 years and then to maintain a dividend growth rate of 3% thereafter.
If the required return on its stock is 11 percent and the company just paid a $1.60 dividend, what would the current share price be?
2.)
The next dividend payment by Ferndale Inc., will be $1.25 per share and the dividends are anticipated to maintain a growth rate of 2 percent forever. The stock currently sells for $30 per share.
What is the expected capital gains yield? Sample answer format: 2 decimals without %. 1.23% will be presented as 1.23 and 2.00% (integer) presented as 2 or 2.00
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