Question

If D1 = $1.25, g (which is constant) = 4.7%, and P0 = $26.00, what is the stock's expected dividend yield for the coming year?

Answer 1

the expected dividend yield is 4.81%

Step-by-step explanation:

The computation of the stock expected dividend yield is shown belo:

Stock expected dividend yield is

= Dividend ÷ Price

where,

Dividend is $1.25

And, the price is $26

Now place these values to the above formula

So, the expected dividend yield is

= $1.25 ÷ $26

= 4.81%

Hence the expected dividend yield is 4.81%