For the past six years, the price of Slippery Rock stock has been increasing at a rate of 8.21 percent a year. Currently, the stock is priced at $43.40 a share and has a required return of 11.65 percent. What is the dividend yield

The dividend yield is 3.44%

Step-by-step explanation:

Consider the provided information.

the price of Slippery Rock stock has been increasing at a rate of 8.21 percent a year.

That means the growth rate is 8.21% or 0.0821

The stock is priced at $43.40 a share and has a required return of 11.65 percent.

That means the value of required return is 11.65% or 0.1165

Substitute the respective values in the formula shown below:

Required return = Dividend yield + growth rate

0.1165 = Dividend yield + 0.0821

Dividend yield = 0.1165 - 0.0821

Dividend yield = 0.0344 or 3.44%

Therefore, the dividend yield is 3.44%