1) You purchased 580 shares of stock at a price of $59.37 per share. Over the la
ID: 2739210 • Letter: 1
Question
1) You purchased 580 shares of stock at a price of $59.37 per share. Over the last year, you have received total dividend income of $680. What is the dividend yield? 1.2 percent
a) 66.4 percent
b) 2.0 percent
C)11.5 percent
d)13.4 percent
2)
The Down and Out Co. just issued a dividend of $2.41 per share on its common stock. The company is expected to maintain a constant 4 percent growth rate in its dividends indefinitely. If the stock sells for $55 a share, what is the company's cost of equity? (Do not round your intermediate calculations.)
rev: 09_20_2012
8.38%
8.13%
8.56%
4.63%
8.98%
Explanation / Answer
1. dividend yield= dividend/ purchase price
=680/(580*59.37)
=0.019748
=1.97%
answer b 2%
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