Consider four different stocks, all of which have a required return of 19 percent and a most recent dividend of $4.50 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 three years at which point the price of the stock will be $151.
a) What is the price of each stock today?
b) What is the dividend yield for each of these four stocks?
Consider four different stocks, all of which have a required return of 19 percent and a most recent dividend of $4.50 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 three years at which point the price of the stock will be $151.
a) What is the price of each stock today?
b) What is the dividend yield for each of these four stocks?
Related questions
Consider four different stocks, all of which have a required return of 19 percent and a most recent dividend of $3.00 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 â5 percent per year, respectively. Stock Z is a growth stock that will increase its dividend by 21 percent for the next two years and then maintain a constant 12 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? (A negative answer should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. 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 | % |
