The current market price of ABCD's stock is $30 per share. ABCD just paid a $2 dividend and its dividend is expected to grow by 5% in the coming year. The required rate of return for ABCD is 15%. What is ABCD's dividend yield and its capital gains yield? a. 6.7%; 8.3% b. 8%; 7% c. 5%; 10% d. 7%; 8% e. 10%; 5%
The current market price of ABCD's stock is $30 per share. ABCD just paid a $2 dividend and its dividend is expected to grow by 5% in the coming year. The required rate of return for ABCD is 15%. What is ABCD's dividend yield and its capital gains yield? a. 6.7%; 8.3% b. 8%; 7% c. 5%; 10% d. 7%; 8% e. 10%; 5%
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 2P
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Transcribed Image Text:The current market price of ABCD's stock is $30 per
share. ABCD just paid a $2 dividend and its dividend is
expected to grow by 5% in the coming year. The
required rate of return for ABCD is 15%. What is ABCD's
dividend yield and its capital gains yield?
a. 6.7%; 8.3%
b. 8%; 7%
c. 5%; 10%
d. 7%; 8%
e. 10%; 5%
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