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A stock just paid an annual dividend of $9.53 per share. The expected growth rate of...

A stock just paid an annual dividend of $9.53 per share. The expected growth rate of the dividend is 5.38%. The required rate of return for the stock is 8.88% per annum. Based on the Constant Dividend Growth Model, what is the expected dividend yield for the stock for the coming year? Answer as a percentage, 2 decimal places (e.g., 12.34% as 12.34).

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Answer #1
Last dividend $                9.53
Rate of return 8.88%
Growth Rate 5.38%
Share price today =last dividend *(1+Growth rate)/(Rate of return-Growth Rate)
Share price today =9.53*(1+0.0538)/(0.0888-0.0538)
Share price today $            286.93
Next dividend= 9.53*(1+5.38%)
Next dividend= $              10.04
Dividend yield= 10.04/286.93
Dividend yield= 3.50%
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