Suppose we observe a stock selling for $120 per share. The next dividend will be $1...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Suppose we observe a stock selling for $120 per share. The next dividend will be $1 per share, and you think the dividend will grow at 5 percent per year forever. What is the capital gains yield? 20 5% 5 0.83% Suppose we observe a stock selling for $120 per share. The next dividend will be $1 per share, and you think the dividend will grow at 5 percent per year forever. What is the capital gains yield? 20 5% 5 0.83%
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
1. Farmer Annie's Ice Cream Shop has calculated the marginal product of labor, and the results are shown in the following table. The wage for workers is $70 per day, and the pints of ice cream sell...
-
Sketch the plots described below and calculate the equations for y(x) from the given information. The plots are all straight lines, Note that the given coordinates refer to abscissa and ordinate...
-
A microwave oven produces electromagnetic radiation at = 12.12cm and produces a power of 760 W. Calculate the number of microwave photons produced by the microwave oven each second.
-
From societys point of view, collusion creates a situation where goods are priced too _________ and outputs too _________.
-
Nelson, Parker, and Rice are partners who share profits 4:3:3, respectively. Parker decides that it would be more profitable for him to operate as a sole proprietor. Nelson and Rice are in agreement...
-
A website listed the battery life (in hours) and luminous intensity (screen brightness, incd/m2) for a sample of tablet computers. Researchers want to know if screen brightness is associated with...
-
Explain the importance and linkage of operations strategy, competitiveness and productivity.
-
What is the difference between convertible preferred shares and participating preferred shares?
-
Of the three models of prosecuting cases-horizontal model, vertical model, and mixed modelwhich do you think would be most appropriate for the prosecutor's office where you attend school?
-
What do you envision as the future of problem-solving courts? Will additional types of courts develop in the years to come? If so, what types of courts might these be?
-
Points \(A\) and \(B\) are on the same electric field line. If an electron is released and moves from A to \(\mathrm{B},\) (a) is the field directed from \(A\) to \(B\) or from \(B\) to \(A\) ? (b)...
-
What are the most common types of sentences imposed by judges in state and federal courts in the United States? Why are intermediate sanctions used so infrequently?
-
The Triple Bottom Line Predict how the implementation of the Triple Bottom Line would affect your current or former organizations performance. Be sure to include at least two short-term consequences...
-
A statistical study shows that the fraction of television sets of a certain brand that are still in service after x years is given by f (x) = e-0.15x. (a) What fraction of the sets are still in...
-
Are retained profits a free source of finance to the business?
-
Discuss the ways in which smaller businesses may seek to raise finance.
-
Rusli Ltd provides a car valet service for car-hire businesses when their cars are returned from hire. Details of the service costs are as follows: Sales revenue is 10 million a year and is all on...
Study smarter with the SolutionInn App