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

Question

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

Requirement 1:

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

  Dividend yield %   Requirement 2:

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

  Capital gains yield %  

Explanation / Answer

Dividend yield= annual dividend/price of share= 2.55/48.7=5.236%

Capital gains yield=(48.7*1.06-48.7)/48.7=6%

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