If the growth rate of dividends (g) is zero, the capital gains yield will be Blank______. Multiple choice question. 100 percent zero cyclical higher than the dividend yield
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If the growth rate of dividends (g) is zero, the capital gains yield will be Blank______.
100 percent
zero
cyclical
higher than the dividend yield
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- Please explain it correctly. I'll rate itConsider the following security: Brous Metalworks Earnings Per Share, Time = 0 $2.00 Dividend Payout Rate 0.250 Return on Equity 0.150 Market Capitalization Rate 0.125 Required: Using the information in the tables above, please calculate the sustainable growth rate, dividends per share, and intrinsic value per share. Then solve for the present value of growth opportunities. (Use cells A5 to B8 from the given information to complete this question.) Brous Metalworks Sustainable Growth Rate Dividends per share (Next Year) Intrinsic Value No-Growth Value Per Share Present Value of Growth Opportunities (PVGO)The required return on a stock is equal to which one of the following if the dividend on the stock decreases by a constant percent per year? O Dividend yield - Capital gains yield O (PO/D1) - g O (D1/PO)/g Dividend yield x Capital gains yield O Dividend yield + Capital gains yield
- A decrease in which of the following will increase the current value of a share according to the dividend growth model? Required rate of return. Dividend amount. Dividend growth rate. Number of future dividends, provided the number is less than infinite.The constant growth model: i. Assumes that dividend income will increase at a consistent rate forever. ii. Can be used to value the worth of a share. iii. States that the market price of a share is only affected by the amount of the dividend. iv. Considers capital gains but ignores the dividend yield. Select one: a. i and ii only b. iii and iv only c. ii. only d. i. onlyIn the context of DDM, a dividend payout ratio equal to 100% implies that the future growth rate of dividends per share (DPS) will be equal to 0%. a. True b. False
- Given the constant growth dividend valuation model, the expected percentage growth in vau of a stock is equal to the capital gains yield for that stock. Select one: O True O False Previous page Next page Return ti: GeneralThe dividend yield (i.e. D1/P0) is a good measure of the expected return on a common stock under which of the following circumstances? g = 0 g > 0 g < 0 g is expected to remain constant over time under no circumstancesA share has expected dividend stream of 10, 20 40 and then 0 from then on (bankruptcy). Its current price is 50. What is its required efficient marrket hypothesis rate of return?
- the dividend growth model may be use to value a stock v=Do(1+g) k-g a. what is the value of a stock if: Do=$2 k==10% g=6% b. what is the value of this stock if the dividend is increased to $3 and the other variables remain constant? c. what is the value os this stock if the required return decline to 7.5 percent and the other variables remain constant? d. what is the value of this stock if the growth rate declines to 4 percent and the other variables remin constant? e. what is the value of this stock if the dividend is increased to $2.30, the growth rate declines to 4 percent, and the required return remains 10 percent?M613... What conditions are necessary for the Constant Dividend Growth Model to be used? Select all that apply. a.The required rate of return must be greater than the dividend growth rate. b.The dividend must be at least $3. c.The company must pay taxes. d.The company's dividend growth rate must be expected to remain constant.
