The following financial information is available on the Haverty Company: Current per share market price $48.00 Most recent per share dividend $3.50 Expected long-term growth rate 5.0% Haverty can issue new common stock to net the company $44 per share. Determine the cost of equity raised through selling new stock using the dividend growth model approach. (Compute answer to the nearest .1%).

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Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.