You buy a share of The Ludwig Corporation stock for $18.20. You expect it to pay dividends of $1.11, $1.1699, and $1.2331 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $21.31 at the end of 3 years.
Calculate the expected dividend yield. Round your answer to two decimal places.
Year 1
Expected Dividend Yield=Expected Dividend/cost of acquisition X 100
=$1.11/$18.2 X100=6.09%
Year 2
Expected Dividend Yield=Expected Dividend/cost of acquisition X 100
=$1.1699/$18.2 X100=6.42%
Year 3
Expected Dividend Yield=Expected Dividend/cost of acquisition X 100
=$1.2331/$18.2 X100=6.77%
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