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The Global Market will pay an annual dividend of $1.46 per share next year. The stock...

The Global Market will pay an annual dividend of $1.46 per share next year. The stock has a current market price of $48 and a dividend growth rate of 2.4 percent. What is the dividend yield of this stock? what is capital gain yield of this stock?

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Answer #1
Required return ( r) D1÷P0+g
Here,
Stock price (P0) $                   48.00
Expected dividend (D1) $                      1.46
Growth rate (g) 2.40%
Required return ( r) 5.44%
1.46÷48+2.4%

Capital gain yield = Growth rate = 2.40%

Dividend yield = 5.44%-2.40% = 3.04%

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