When you bought a share of stock in Killnum yesterday, analysts believed that the dividend next period would be $1.50 and that dividends would grow by 8%. Today Killnum Corp. announces that the dividend for the next year will be $2.00 per share rather than the originally expected $1.50 per share. From then on, it is expected that dividends will resume their historical constant growth rate of 5% per year. If your required rate of return is 12.5%, what will be your overnight capital gains yield on this stock?

Answer rating: 100% (QA)

To calculate the overnight capital gains yield on the stock of Killnum Corp we need to first determi... View the full answer