contestada

Suppose you know that a company’s stock currently sells for $65 per share and the required return on the stock is 15 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? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Respuesta :

Answer: Current dividend = $57.35

Explanation:

Given:

Company’s stock currently sells for $65 per share

The required return on the stock = 15%

Required return = [tex]\left [ \frac{Current dividend \times (1+growth rate)}{current share price} \right ]+(growth rate)[/tex]

Required return = Dividend yield + Capital gains

15% = [tex]\frac{15}{2} + \frac{15}{2}[/tex]

[tex]\therefore[/tex] Dividend yield = 7.5% , Capital gains = 7.5%

Now we will compute the current dividend as follow:

Dividend yield = [tex]\left [ \frac{Current dividend \times (1+growth rate)}{current share price} \right ][/tex]

[tex]\therefore[/tex] Current dividend = [tex]\frac{65\times 7.5}{1+7.5}[/tex]

Current dividend = $57.35

Otras preguntas