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10. Assume a corporation has just paid a dividend of $ 2.29 per share. The dividend is expected to grow at a rate of 3.5%
10. Assume a corporation has just paid a dividend of $ 2.29 per share. The dividend is expected to grow at a rate of 3.5% per year forever, and the discount rate is 9.1%. What is the dividend yield of this stock?
Hint 1: what do the Dividend Yield and Capital Gains Yield add up to?
Hint 2: if the dividend grows at the same rate forever, what is equal to the Capital Gains Yield?
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