Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. suppose a firms stock is selling for $10.50. they

Suppose a firms stock is selling for $10.50. They just paid a $1 dividend and...

60.1K

Verified Solution

Question

Finance

Suppose a firms stock is selling for $10.50. They just paid a $1 dividend and dividends are expected to grow at 5% per year.

What is the required return?

R = [$1 (1.05)]/10.50 + 0.05 = 15%

What is the dividend yield? (D1/P0)

[$1 (1.05)]/$10.50 = 10%

What is the capital gains yield?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

3. The cost of debt What do lenders require, and what kind of debt costs the company? The...

Finance
Q

What are the methods for calculating the free energy difference between two states? What are the...

Physics
Q

As reported in "Runner's World" magazine, the times of the finishers in the New York City...

Basic Math
Q

Which rule explains why these triangles are congruent Q U HHH SAS SSS VS W...

Geometry
Q

Use the frequency diagram which shows the number of American drivers in millions according to...

Basic Math
Q

Find the linearization of the function f x y 96 3x 2y2 at the point...

Basic Math
Q

10 a Find the critical points and draw the phase portrait for the autonomous DE...

Calculus
Q

The graph below is the function f x 5 4 3 2 1 5 4...

Calculus
Q

Question 14 (1 point) Blue Inc. has a year-end of June 30. On...

Accounting
Q

The Management of Cullumber Manufacturing Company is evaluating two forklift systems to use in its...

Accounting
Q

"How much will I have in my account at a specific point in the future,...

Accounting
Q

It is common for financial advisors to counsel individuals to invest in the stock market...

Finance