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ABC inc is expected to pay a dividend of $1.2 per share at the end of the first year and $1.3 at the end of
ABC inc is expected to pay a dividend of $1.2 per share at the end of the first year and $1.3 at the end of year 2. You expect ABC's stock price to be $22 right after the year 2 dividend is paid at the end of year 2. The risk free rate is 1% and the market premium is 5%
. ABC has an equity beta of 1.2 and the WACC of 4%.
Suppose you plan to hold ABC stock for only one year. Your capital gain rate from holding ABC stock for the first year is:
Round to 1 decimal place.
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