Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assume a corporation has just paid a dividend of $ 3.96 per share. The dividend is expected to grow at a rate of 4.8% per

Assume a corporation has just paid a dividend of $ 3.96 per share. The dividend is expected to grow at a rate of 4.8% per year forever, and the discount rate is 5.7%. 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? Enter your answer as a percentage, rounded to 1 decimal, and without the percentage sign. So, if your answer is 0.05678, just enter 5.7.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Bitcoins Investment

Authors: Paulita Kingrey

1st Edition

979-8353894094

More Books

Students also viewed these Finance questions