Discuss the relationship among the various returns

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Consider four different shares, all of which have a required rate of 20% and a most recent dividend of R4.50 per share. Shares W, X and Y are expected to maintain constant growth rates in dividends for the forseeable future of 10%, 0%, and -5% per year, respectively. Share Z is a growth share that will increase its dividend by 20% for the next 2 years, and then maintain a constant 12% growth rate thereafter.

(a) What is the dividend yield for each of these four shares?

(b) What is the expected capital gains yield?

Reference no: EM131021093

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