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4. You are buying a stock that just paid a $1.00 dividend. Dividends and earnings are expected to grow at a constant rate of 6%.
4. You are buying a stock that just paid a $1.00 dividend. Dividends and earnings are expected to grow at a constant rate of 6%. Investors require a 9% return. What is the stock worth today? one year from today? 5. You expect a $2.00 annual dividend in the coming year for a stock that is currently priced at $23. If you believe you can sell the stock in one year for $26, what is the holding period return? What is the dividend yield? what is the capital gains yield? 6. You are buying a stock today that is priced at $30. If the constant growth rate is 7% and the LAST dividend paid was $2.00, what is the dividend yield? the capital gains or growth yield? and the total required rate of return of the investor
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