The next dividend payment by Wyatt, Inc., will be $2.85 per share. The dividends

Question

The next dividend payment by Wyatt, Inc., will be $2.85 per share. The dividends are anticipated to maintain a growth rate of 7.50 percent, forever. Assume the stock currently sells for $49.30 per share.

What is the dividend yield? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

What is the expected capital gains yield? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

The next dividend payment by Wyatt, Inc., will be $2.85 per share. The dividends are anticipated to maintain a growth rate of 7.50 percent, forever. Assume the stock currently sells for $49.30 per share.

Explanation / Answer

Dividend yield=Annual dividend/Current price

=(2.85/49.30)=5.78%(Approx)

Capital gains yield=Growth rate=7.50%

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