Portman Industries just paid a dividend of $1.92 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 16.00% over the next year. After the next year, though, Portman’s dividend is expected to grow at a constant rate of 3.20% per year.  Term Value Dividends one year from now (D1D1) $2.2272    Horizon value (Pˆ1)P̂1 $22.10     Intrinsic value of Portman’s stock $21.41     The risk-free rate (rRFrRF) is 4.00%, the market risk premium (RPMRPM) is 4.80%, and Portman’s beta is 2.00. Assuming that the market is in equilibrium,  What is the expected dividend yield for Portman’s stock today?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Portman Industries just paid a dividend of $1.92 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 16.00% over the next year. After the next year, though, Portman’s dividend is expected to grow at a constant rate of 3.20% per year. 
Term
Value
Dividends one year from now (D1D1) $2.2272   
Horizon value (Pˆ1)P̂1 $22.10    
Intrinsic value of Portman’s stock $21.41  
 
The risk-free rate (rRFrRF) is 4.00%, the market risk premium (RPMRPM) is 4.80%, and Portman’s beta is 2.00.
Assuming that the market is in equilibrium, 
What is the expected dividend yield for Portman’s stock today?
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