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Given the following information, calculate the expected dividend yield for Chicago Bears Inc.: beta = 0.6; Market Risk Premium(RP M ) = 7%; risk free
Given the following information, calculate the expected dividend yield for Chicago Bears Inc.: beta = 0.6; Market Risk Premium(RPM) = 7%; risk free rate(rRF) = 8%; dividend expected to be paid in one year(D1) = $2.00; current stock price(P0) = $25.00. Assume the stock is in equilibrium and exhibits constant growth. (Hint: As discussed in mini-lecture part D, Total return = Dividend yield + Capital gains yield.)
A. | 0% | |
B. | 8.0% | |
C. | 3.8% | |
D. | 2.5% | |
E. | 4.2% |
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