The next dividend payment by Mosby, Inc., will be $2.65 per share. The dividends

Question

The next dividend payment by Mosby, Inc., will be $2.65 per share. The dividends are anticipated to maintain a 6.50 percent growth rate, forever. Assume the stock currently sells for $48.90 per share. Requirement 1: What is the dividend yield? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).) Dividend yield % Requirement 2: What is the expected capital gains yield? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)

Explanation / Answer

Dividend Yield = Dividend/ Initial Price Dividend = 2.65/48.90 Dividend Yield = 5.41%

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