Shares of common stock of the Samson Co. offer an expected total return of 15.6 percent....

Question

Question

Shares of common stock of the Samson Co. offer an expected total return of 15.6 percent. The dividend is increasing at a cons

3.32 percent 10.90 percent 4.70 percent 20.30 percent 15 60 percent.

The next dividend payment by Hot Wings, Inc., will be $3.25 per share. The dividends are anticipated to maintain a 4 percent

400% 5.70% 922% 95%。 970%

Say you own an asset that had a total return last year of 11 percent. If the inflation rate last year was 6 percent, what was

4.82% 46296 ООООО -4.50% 49296 4.7296

Answer 1

Answer #1

1). Required Return = Dividend Yield + Capital Gains Yield

15.6% = Dividend Yield + 4.7%

Dividend Yield = 15.6% - 4.7% = 10.9%

Hence, 2nd option is correct.

2). r = [D1 / P0] + g

= [$3.25 / $57] + 0.04 = 0.057 + 0.04 = 0.097, or 9.7%

Hence, 5th option is correct.

3). Real Return = [(1 + Nominal Return) / (1 + Inflation Rate)] - 1

= [(1 + 0.11) / (1 + 0.06)] - 1 = 1.0472 - 1 = 0.0472, or 4.72%

Hence, 5th option is correct.

Answer 2

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