The Lost Continent Store pays a constant dividend. Last year, the dividend yield was 5.75 percent...

The Lost Continent Store pays a constant dividend. Last year, the dividend yield was 5.75 percent when the stock was selling for $67.5 a share. What must the stock price be today if the market currently requires a 5.25 percent dividend yield on this stock?

A. $59.04
B. $61.63
C. $73.93
D. $71.52
E. $78.24

Expert Solution

Given that-
Price last year =	67.5
Dividend yield =	5.75%
we know that dividend yield = Dividend/ Price of the stock
therefore dividend = 67.5*5.75%=	3.8813

Dividend yield now =	5.25%
Therefore price today = 3.8813/5.25%	73.93

Ans = option C.	73.93

jeff jeffy answered 1 month ago

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The Lost Continent Store pays a constant dividend. Last year, the dividend yield was 5.75 percent...

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