Concept explainers
Consider four different stocks, all of which have a required return of 17% and a most recent dividend of $4.50 per share. Stocks W, X, and Y are expected to maintain constant growth rates in dividends for the foreseeable future of 10%, 0%, and 25% per year, respectively. Stock Z is a growth stock that will increase its dividend by 20% for the next two years and then maintain a constant 12% growth rate thereafter.
What is the dividend yield for each of these four stocks? (Do not round intermediate calculations. Round the final answers to 2 decimal places.)
dividend yield
stock w
stock x
stock y
stock z
What is the expected
capital gain yeild
stock w
stock x
stock y
stock z
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