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You expect a share of stock to pay dividends of $2.00, $2.05, and $2.40 in each of the next 3 years. You believe the stock
You expect a share of stock to pay dividends of $2.00, $2.05, and $2.40 in each of the next 3 years. You believe the stock will sell for $32.00 at the end of the third year. a. What is the stock price if the discount rate for the stock is 10%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Stock price $ 29.36 b. What is the dividend yield for year 1? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Dividend yield 6.81 % c. What will be the dividend yield at the start of year 2? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Dividend yield 6.77 %
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