Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

with all explanations please) 1)Winston Co. has a dividend-paying stock with a total return for the year of -6.5 percent. Which one of the following

with all explanations please)

1)Winston Co. has a dividend-paying stock with a total return for the year of -6.5 percent. Which one of the following must be true?

A. The dividend must be constant.

B. The stock has a negative capital gains yield.

C. The dividend yield must be zero.

D. The required rate of return for this stock increased over the year.

E. The firm is experiencing supernormal growth.

2)Miller Brothers Hardware paid an annual dividend of $0.95 per share last month. Today, the company announced that future dividends will be increasing by 2.6 percent annually. If you require a 13 percent rate of return, how much are you willing to pay to purchase one share of this stock today?

A. $9.23

B. $9.37

C. $9.67

D. $9.72

E. $9.88

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

Step: 3

blur-text-image

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

Options Futures And Other Derivatives

Authors: John C. Hull

11th Edition

013693997X, 9780136939979

More Books

Students also viewed these Finance questions