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stich3 [128]
3 years ago
8

The next dividend payment by Savitz, Inc., will be $2.34 per share. The dividends are anticipated to maintain a growth rate of 4

.5 percent forever. If the stock currently sells for $37 per share.
a. What is the required return?
b. What is the dividend yield?
c. What is the expected capital gains yield?
Business
1 answer:
STALIN [3.7K]3 years ago
3 0

Answer:

a. 10.8%

b. 6.32%

c. 4.5%

Explanation:

a. Required return= (Expected dividend payment/current stock price) + dividend growth rate

Required return= (2.34/37)+0.045

Required return= 0.108  ⇒ 10.8%

b. Dividend yield= dividend per share / price per share

Dividend yield= 2.34/37= 0.0632 ⇒ 6.32%

c. The capital gains yield refers to the rise in the price of the stock. In this case, the statement indicates that the dividends are anticipated to maintain a growth rate of 4.5 percent forever and according to the definition of capital gains yield that would be the answer for the expected capital gains yield.

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2 years ago
What is the importance of Business Development Services?​
antiseptic1488 [7]

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3 years ago
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A)

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4 years ago
Statement of retained earnings Hayes Enterprises began 2015 with a retained earnings balance of ​$928,000. During​ 2015, the fir
valina [46]

Answer and Explanation:

The preparation and computation are shown below:

                            Hayes Enterprises  

Statement of Retained Earnings December 31, 2015  

Particulars              Amount $             Amount $

beginning Balance 928,000  

Add:

Earning during

the year                       377,000  

                                 1,305,000  

Less: Dividend

paid to

Preferred Stockholders 47,000   1,258,000

Less: Dividend

paid on

common Stock                          210,000

Closing balance                          1,048,000

b) Earning per share is

= Earning ÷ No. of Common Stock

= ($377000 - $47000) ÷ 140000

= $2.36 per share

And,  

c) Cash dividend per share is

= $210,000 ÷ 140,000

= $1.50

8 0
3 years ago
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