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The last dividend paid (D0) on a stock was $2.25. The required rate of return is 8.25% and the expected constant growth rate is 3.25%.
The last dividend paid (D0) on a stock was $2.25. The required rate of return is 8.25% and the expected constant growth rate is 3.25%. What is the current price of the stock? What will it's price be in three years? What are the capital gains and dividend yields in Year 3.
Bonus (1 point): If you know that the required rate of return on a stock is 10.50% and the expected constant growth rate is 3.50%, what is the expected dividend yield?
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