Question
Madison Industries stock currently sells for $12 per share. The stock just paid an annual dividend of $1.50 per share (i.e., D 0 = $1.50).
Madison Industries stock currently sells for $12 per share. The stock just paid an annual dividend of $1.50 per share (i.e., D0 = $1.50). The dividend is expected to grow indefinitely at 7% per year. Use the dividend growth model to answer the following questions. Show your answers to the nearest 0.1%.
What is the required rate of return on Madisons stock?
How much is the expected dividend yield?
How much is the expected capital gains yield?
What is the expected stock price one year from now?
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International Finance Transactions Policy And Regulation
Authors: Hal S. Scott
15th Edition
159941547X, 978-1599415475
