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You have the following data regarding a share of stock in a particular firm: The dividend at the end of the current year is expected
You have the following data regarding a share of stock in a particular firm:
- The dividend at the end of the current year is expected to be $6.67/share
- The dividend is expected to grow at a constant rate forever
- The dividend growth rate is -0.37%
- Investors in the stock expect a 22.02% total return from investing in the stock
What will be the capital gains yield for the second year (t=1 to t=2)?
(Answer to the nearest 0.01%)
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