Question

the next dividend payment by im, incorporated, will be $1.87 per share. the dividends are anticipated to maintain a growth rate of 4.3 percent forever. the stock currently sells for $37 per share. a. what is the dividend yield? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. what is the expected capital gains yield? (enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.)

Answer 1

Dividend Yield = Dividend for Next Period/Current Price

Dividend Yield = $1.87/$37

Dividend Yield = 5.05%

Capital Gains Yield = Growth Rate

Capital Gains Yield = 4.3%

What is Dividend Yield?

The relationship between a stock's annual dividend payment and stock price is defined as the dividend yield. Know that when you use the term "dividend yield," you are only referring to the dividend yield for the specific stock price at that time because dividend yield clearly fluctuates as stock prices do on the stock market. The dividend yield would fluctuate if a stock's price changed significantly during a trading day.

Dividend Yield = Annual Dividends Per Share ÷ Current Share Price

To know more about Dividend Yield refer:

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