Question
You bought a Woolworths share on 1 January 2013 for $44.50 and sold it one year later for$48.50. During the year, Woolworths paid a dividend
You bought a Woolworths share on 1 January 2013 for $44.50 and sold it one year later for$48.50. During the year, Woolworths paid a dividend of $2.50 per share.
a.What is the dividend yield, the capital gain yield and the total yield?
b. You have invested in Huawei Ltd whose dividend per share has grown 10% per annum for the past 10 years. Assume that Huawei's growth rate is expected to be maintained indefinitely. The latest dividend per share was 90 cents was yesterday. If your required rate of return is 15 per cent, what is the value of Huawei's shares?
c. The Treasury bond rate is 3%, the average return on the All Ords Index is 12%, and ANZ has a beta of 1.2. According to the CAPM, what should be the required rate of return on ANZ shares?
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Fundamentals of Advanced Accounting
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
5th edition
978-0077924379, 77924371, 978-0078025396, 78025397, 978-0077425654, 77425650, 978-0077667061
