Dividend from Financial Statements Stockholder's Cash Dividend Year Stock Price Equity (in millions) Div/share (S) Yield 3.00% S 2.70% S 2.60% S 97.33 2015 2.92 2,491.00 2016 3.12 429.00 115.56 2017 3.32 1,030.00 127.69 3. The rate of return on equity (i.e., the cost of stock) based on the new dividend yield you calculated above Cash Return on Year Div/Share Stock Price Investment ($)+1.75 $ $ CALCULATE ROI 2015 2016 2017 4.67 97.33 4.87 5.07 23.72% [(Dividends $1.75) (new price old price)]/ (old price) 14.89% [(Dividends $1.75) (new price - old price)]/ (old price) 115.56 $ 127.69
Dividend from Financial Statements Stockholder's Cash Dividend Year Stock Price Equity (in millions) Div/share (S) Yield 3.00% S 2.70% S 2.60% S 97.33 2015 2.92 2,491.00 2016 3.12 429.00 115.56 2017 3.32 1,030.00 127.69 3. The rate of return on equity (i.e., the cost of stock) based on the new dividend yield you calculated above Cash Return on Year Div/Share Stock Price Investment ($)+1.75 $ $ CALCULATE ROI 2015 2016 2017 4.67 97.33 4.87 5.07 23.72% [(Dividends $1.75) (new price old price)]/ (old price) 14.89% [(Dividends $1.75) (new price - old price)]/ (old price) 115.56 $ 127.69
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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What effect would the calculation performed have in terms of shareholder value? In other words, suppose the company’s goal is to maximize shareholder value. How will the rate of
Transcribed Image Text:Dividend from Financial Statements
Stockholder's
Cash
Dividend
Year
Stock Price
Equity (in millions)
Div/share (S)
Yield
3.00% S
2.70% S
2.60% S
97.33
2015
2.92
2,491.00
2016
3.12
429.00
115.56
2017
3.32
1,030.00
127.69
![3. The rate of return on equity (i.e., the cost of stock) based on the new dividend yield you calculated above
Cash
Return on
Year
Div/Share
Stock Price
Investment
($)+1.75
$
$
CALCULATE ROI
2015
2016
2017
4.67
97.33
4.87
5.07
23.72% [(Dividends $1.75) (new price old price)]/ (old price)
14.89% [(Dividends $1.75) (new price - old price)]/ (old price)
115.56
$
127.69](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5b2b52b1-0127-4000-bb49-59ba3fafc4c8%2F09c53972-a7ae-4315-a679-a31139f5532e%2Fj4fymkd.png&w=3840&q=75)
Transcribed Image Text:3. The rate of return on equity (i.e., the cost of stock) based on the new dividend yield you calculated above
Cash
Return on
Year
Div/Share
Stock Price
Investment
($)+1.75
$
$
CALCULATE ROI
2015
2016
2017
4.67
97.33
4.87
5.07
23.72% [(Dividends $1.75) (new price old price)]/ (old price)
14.89% [(Dividends $1.75) (new price - old price)]/ (old price)
115.56
$
127.69
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