Question

Krell Industries has a share price of $22.35today. If Krell is expected to pay a dividend of $1.14this year and its stock price is expected to grow to $23.67 at the end of the​ year, what is​ Krell's dividend yield and equity cost of​ capital?

The dividend yield is __​%.

​(Round to one decimal​ place.)

The capital gain rate is__​%.

​(Round to one decimal​ place.)

The total return is__%.

​ (Round to one decimal​ place.)

Answer 1

	Po =	Purchase Price
	P1 =	Sale Price
A)	DIVIDEND YIELD =	Dividend Income/ P0 * 100
		1.14 / 22.35 * 100
		5.10%
B)	CAPITAL GAIN YIELD =	(P1 - P0)/ P0 * 100
		(23.67 - 22.35) / 22.35 * 100
		5.9%
C)	Total Return on Shares =	(Dividend + (P1 - P0)) * No of Shares
		(1.14 + 23.67 - 22.35) * 1
		2.46
	Total Return in % =	Return on Share / P0 * 100
		2.46 / 22.35 * 100
		11.0%