Consider four different stocks, all of which have a required return of 16 percent and a most rece...
|
Consider four different stocks, all of which have a required return of 16 percent and a most recent dividend of $2.80 per share. Stocks W, X, and Y are expected to maintain constant growth rates in dividends for the foreseeable future of 8 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 two years and then maintain a constant 12 percent growth rate, thereafter. |
| Requirement 1: | |
|
What is the dividend yield for each of these four stocks?
(Do not round intermediate
calculations. Round your answers to 2 decimal
places (e.g., 32.16).) |
| Dividend yield | |
| Stock W | % |
| Stock X | % |
| Stock Y | % |
| Stock Z | % |
| Requirement 2: | |
|
What is the expected capital gains yield for each of these four
stocks? (Do not round intermediate
calculations. Negative amounts should be indicated
by a minus sign. Leave no cells blank - be certain
to enter "0" wherever required. Round your answers to 2 decimal
places (e.g., 32.16).) |
| Capital gains yield |
|
| Stock W | % |
| Stock X | % |
| Stock Y | % |
| Stock Z | % |
Homework Answers
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