Question: 1 . A stock is expected to pay a dividend next year of $ 2 . 1 . The dividend amount is expected to grow

1. A stock is expected to pay a dividend next year of $2.1.The dividend amount is expected to grow at an annual rate of 5.1% indefinitely. Assuming a required return on the stock of 12.6% in the future, the dividend yield on the stock is ______%.
2. A stock is expected to pay a dividend of $1.2 one year from now, $1.8 two years from now, and $2.4 three years from now. The growth rate in dividends after that point is expected to be 9% annually. The required return on the stock is 13%.The estimated price per share of the stock sixyears from now should be $_________.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!