Ask Question
17 July, 06:41

The current price of Janco stock is $16.77. Dividends are expected to grow at 4.4% indefinitely and the most recent dividend paid yesterday was $3.93. What is the required rate of return, dividend yield, and capital gains yield on Janco's stock? (show your answers to 4 decimal places)

+2
Answers (1)
  1. 17 July, 07:39
    0
    Required return = 28.87%

    Dividend yield = 24.4658%

    Capital gains yield = 4.4%

    Explanation:

    Required return = (D1/Current price) + Growth rate

    = (3.93*1.044) / 16.77+0.044

    =28.8658% (or 0.2887 approx)

    Dividend yield=Dividend for next period/Current price

    = (3.93*1.044) / 16.77

    =24.4658% (or 0.2447 approx)

    Capital gains yield=Growth Rate

    =4.4% (or 0.044)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The current price of Janco stock is $16.77. Dividends are expected to grow at 4.4% indefinitely and the most recent dividend paid yesterday ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers