Answer:
Dividend yield for W = 5%
Dividend yield for X = 15%
Dividend yield for Y = 20%
Dividend yield for Z = 4.6%
Explanation:
For a constant growth stock ![Price =\frac{D1}{r-g}](https://tex.z-dn.net/?f=Price%20%3D%5Cfrac%7BD1%7D%7Br-g%7D)
If r is made subject of formula; r=
= div yield + growth rate
For Stock W, given r = 15% and g= 10%; dividend yield = 15%-10%=5%
For Stock X, given r = 15% and g= 0%; dividend yield = 15%-0%=15%
For Stock Y, given r = 15% and g= -5%; dividend yield = 15%-(-5)%=20%
For Stock Z, the price of the stock today is calculated as follows:
Price of the stock today =
.
where P2= ![\frac{D3}{ke-g}](https://tex.z-dn.net/?f=%20%5Cfrac%7BD3%7D%7Bke-g%7D)
Price of the stock today =
=109.57
Therefore dividend yield =
=
4.6%