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If D0= $1.75, g (which is constant) = 5.5%, and P0= $44, what is the stock’s...

If D0= $1.75, g (which is constant) = 5.5%, and P0= $44, what is the stock’s expected dividend yield for the coming year?

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Answer #1

Dividend yield=Dividend for coming year/Current price

=(1.75*(1+Growth Rate)/44

=(1.75*1.055)/44

which is equal to

=4.20%(Approx).

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