Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
4th Edition
ISBN: 9780134083278
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
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Chapter 9, Problem 2P

Anle corporation has a current price of $20, is expected to pay a dividend of $1 in one year, and its expected price right after paying that dividend is $22.

  1. a. What is Anle’s expected dividend yield?
  2. b. What is Anle’s expected capital gain rate?
  3. c. What is Anle’s equity cost of capital?
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You just purchased a share of Northstar Sports for $92.46. You expect to receive a dividend of $4.80 in one year. If you expect the price after the dividend is paid to be $94.23, what total return do you expect to earn over the year? What do you expect to be your dividend yield? What do you expect to be your capital gain rate? ... a. If you expect the price after the dividend is paid to be $94.23, what total return do you expect to earn over the year? Your expected total return to earn over the year is 7.11 %. (Round to two decimal places.) b. What do you expect to be your dividend yield? Your expected dividend yield is%. (Round to two decimal places.)
What is the answer ?
Need help with this pls. Thank you!

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Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book

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Dividend disocunt model (DDM); Author: Edspira;https://www.youtube.com/watch?v=TlH3_iOHX3s;License: Standard YouTube License, CC-BY