Question
Blue is currently selling for $28 per share. Its next dividend (in one year) is forecasted to be $1. Immediately after the dividend is paid,
Blue is currently selling for $28 per share. Its next dividend (in one year) is forecasted to be $1. Immediately after the dividend is paid, you expect the price to be $32.
a. What is its expected dividend yield?
b. What is its expected capital gain rate?
c. What is the equity investors' expected return?
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Fundamentals Of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
5th Edition
0135811600, 978-0135811603
