Problem 7-6 Stock Valuation [LO 1]

Suppose you know that a companys stock currently sells for $65.10 per share and the required return on the stock is 12 percent. You also know that the total return on the stock is evenly divided between capital gains yield and dividend yield.

Required:

If its the companys policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Dividend per share

$