The next dividend payment by Wyatt, Inc., will be $2.30 per share. The dividends

Question

The next dividend payment by Wyatt, Inc., will be $2.30 per share. The dividends are anticipated to maintain a growth rate of 4.5 percent forever. Assume the stock currently sells for $39.85 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 $2.30 per share. The dividends are anticipated to maintain a growth rate of 4.5 percent forever. Assume the stock currently sells for $39.85 per share.

Explanation / Answer

1. Dividend Yield = 2.30/39.85 = 5.77%

2. Capital gain yield = growth rate = 4.5%

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