In: Finance
Consider four different stocks, all of which have a required return of 15 percent and a most recent dividend of $4.20 per share. Stocks W, X, and Y are expected to maintain constant growth rates in dividends for the foreseeable future of 10 percent, 0 percent, and –5 percent per year, respectively. Stock Z is a growth stock that will increase its dividend by 20 percent for the next two years and then maintain a constant 10 percent growth rate thereafter. |
What is the dividend yield for each of these four stocks? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
Dividend yield | |
Stock W | % |
Stock X | % |
Stock Y | % |
Stock Z | % |
What is the expected capital gains yield for each of these four stocks? (Leave no cells blank - be certain to enter "0" wherever required. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
Capital gains yield | |
Stock W | % |
Stock X | % |
Stock Y | % |
Stock Z | % |
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