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Please help me with question #3. thank you. 2. Stock Values The next dividend payment by Hoffman, Inc., will be $2.65 per share. The dividends
Please help me with question #3. thank you.
2. Stock Values The next dividend payment by Hoffman, Inc., will be $2.65 per share. The dividends are anticipated to maintain a growth rate of 4.5% forever. If the stock currently sells for $43.15 per share, what is the required return?
R = (D1 / P0) + g
R = ($2.65 / $43.15) + 0.045
R = 0.1064, or 10.64%
3. Stock Values For the company in the previous problem, what is the dividend yield? What is the expected capital gains yield?
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