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Question: A company paid a dividend of $1.25/share at the end of the year. They plan to increase the dividends by 20% year 1, 15% year 2 and 3% a year after that indefinitely. What are you willing to pay for this stock today if the required return is 18%?

Lopez. LLC pays a constant annual dividend of $1.48 per share on its stock. Last year at this time, the market rate of return on this stock was 15.7 percent. Today, the market rate has fallen to 13.3 percent. What would your capital gains yield have been if you had purchased this stock one year ago and then sold the stock today?

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Category:- Basic Finance
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