A stock just paid an annual dividend of $9.53 per share. The expected growth rate of the dividend is 5.38%. The required rate of return for the stock is 8.88% per annum. Based on the Constant Dividend Growth Model, what is the expected dividend yield for the stock for the coming year? Answer as a percentage, 2 decimal places (e.g., 12.34% as 12.34).
|Last dividend||$ 9.53|
|Rate of return||8.88%|
|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=||$ 10.04|
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