o14. Suppose your know that a company\'s stock currently sells for $74.27 per sh

Question

o14. Suppose your know that a company's stock currently sells for $74.27 per share and the required return on the stock is 9.05 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? Omit the $ dollar sign and comma in your answer. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16).

Explanation / Answer

Dividend yield = 9.05 *1/2 = 4.525

Current dividend = current price *dividend yield

                         = 74.27 * .04525

                         = $ 3.36 per share

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.