Company BestWare is expected to pay a dividend of $5.91 next year, and the company's stock is currently selling at $57.16. The company's WACC is 12.11%. What's the company's capital gains yield?
Company BestWare is expected to pay a dividend of $5.91 next year, and the company's stock is currently selling at $57.16. The company's WACC is 12.11%. What's the company's capital gains yield?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Company BestWare is expected to pay a dividend of $5.91 next year, and the company's stock is currently selling at $57.16. The company's WACC is 12.11%.
What's the company's
Expert Solution
Step 1
The capital gain yield is the rate of return that is earned due to the increase in the value of the investment. The capital gain yield does not consider the gain earned with the help of interest and dividends.
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