Question 3 20 pts Stock XYZ has a current dividend of $3.00 The dividend is expected...

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Question 3 20 pts Stock XYZ has a current dividend of $3.00 The dividend is expected to grow forever at a rate of 3.00% Based

Answer 1

Answer #1

Dividend Yield = Expected Dividend/Current Price = Div1/P0

Div Po r-g Po= Price of Stock Div = Estimat ed Dividends for Next Period rRequired Rate of Return g Growth Rate

Div1 = $3 * (1 + 3%) = $3.09

$3.09 Po 0.04 0.03$

$P=309$

Dividend Yield = $3.09/$309 = 1.00%

Answer 2

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