The next dividend payment by Mosby, Inc., will be $2.55 per share. The dividends

Question

The next dividend payment by Mosby, Inc., will be $2.55 per share. The dividends are anticipated to maintain a 6.00 percent growth rate, forever. Assume the stock currently sells for $48.70 per share.

What is the dividend yield? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)

What is the expected capital gains yield? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)

The next dividend payment by Mosby, Inc., will be $2.55 per share. The dividends are anticipated to maintain a 6.00 percent growth rate, forever. Assume the stock currently sells for $48.70 per share.

Explanation / Answer

Dividend yield = 2.55 / 48.7 = 0.05236 = 5.24%

capital gains yield =6%

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