Consider four different stocks, all of which have a required return of 19 percent and 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 of 10 percent, 0 percent, and -5 percent per year, respectively. Stock Z is a growth stock and its dividend will increase by 20 percent for the next two years and then maintain a constant growth rate of 12 percent growth rate thereafter. What is the dividend yield for each of these stocks? What is the expected capital gains yield? Discuss the relationship among the various returns that you find for each of these stocks.
Consider four different stocks, all of which have a required return of 19 percent and 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 of 10 percent, 0 percent, and -5 percent per year, respectively. Stock Z is a growth stock and its dividend will increase by 20 percent for the next two years and then maintain a constant growth rate of 12 percent growth rate thereafter. What is the dividend yield for each of these stocks? What is the expected capital gains yield? Discuss the relationship among the various returns that you find for each of these stocks.
Related questions
Consider four different stocks, all of which have a required return of 19 percent and a most recent dividend of $3.00 per share. Stocks W, X, and Y are expected to maintain constant growth rates in dividends for the foreseeable future of 10 percent, 0 percent, and â5 percent per year, respectively. Stock Z is a growth stock that will increase its dividend by 21 percent for the next two years and then maintain a constant 12 percent growth rate, thereafter.
What is the dividend yield for each of these four stocks? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
| DIVIDEND YIELD | |
| Stock W | |
| Stock X | |
| Stock Y | |
| Stock Z |
What is the expected capital gains yield for each of these four stocks? (A negative answer should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
| Capital gains yield |
| Stock W | % |
| Stock X | % |
| Stock Y | % |
| Stock Z | % |
