Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 4 1 pts Suppose you know a company's stock currently sells for $ 4 1 per share and the required return on the stock

Question 4
1 pts
Suppose you know a company's stock currently sells for $41 per share and the required return on the stock is 0.11. You also know that the required return is evenly divided between the capital gains yield (G) and the dividend yield (D1/PO)(this means that if the required retun is 9%, the capital gains yield is 4.5% and the dividend yield is 4.5%).If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? Answer with 2 decimals (e.g.1.23)
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Finance In Canada

Authors: Harvey S. Rosen, Wen, Snoddon

4th Canadian Edition

0070071837, 978-0070071834

More Books

Students also viewed these Finance questions