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Assume a corporation has just paid a dividend of $4.35 per share. The dividend is expected to grow at a rate of 3.1% per year
Assume a corporation has just paid a dividend of $4.35 per share. The dividend is expected to grow at a rate of 3.1% per year forever, and the discount rate is 7.7%. 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
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