Ask Question
7 July, 07:53

The next dividend payment by Savitz, Inc., will be $2.34 per share. The dividends are anticipated to maintain a growth rate of 4.5 percent forever. The stock currently sells for $37 per share. a. What is the dividend yield?

+2
Answers (1)
  1. 7 July, 08:16
    0
    Market value of stock MV=$37

    Dividend D1=$2.34

    Growth rate g=4.5%

    Dividend yield Ke=?

    Formula;

    MV=D1 / (Ke-g)

    37=2.34 / (Ke-.045)

    37Ke-1.665=2.34

    Ke = (2.34+1.665) / 37

    Ke=10.8%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The next dividend payment by Savitz, Inc., will be $2.34 per share. The dividends are anticipated to maintain a growth rate of 4.5 percent ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers