Relationship between dividend and capital gains yields

Assignment Help Operation Management

Reference no: EM131746679

Taussig Technologies Corporation (TTC) has been growing at a rate of 20% per year in recent years. This same growth rate is expected to last for another 2 years, then decline to gn= 6%.

a) If D0= $1.60 and rs= 10%, what is TTC's stock worth today? What are its expected dividend and capital gains yields at this time, that is, during Year 1?

b) Now assume that TTC's period of supernormal growth is to last for 5 years rather than 2 years. How would this affect the price, dividend yield, and capital gains yield? Answer in words only.

c) What will TTC's dividend and capital gains yields be once its period of supernormal growth ends? (Hint: These calues will be the same regardless of whether you examine the case of 2 or 5 years of supernormal growth; the calculations are very easy.)

d) Of what interest to investors is the changing relationship between dividend and capital gains yields over time?

Reference no: EM131746679

Questions Cloud

Culture of mexico where wal-mart was successful to culture : Compare the culture of Mexico where Wal-Mart was successful to the culture of Germany and South Korea.

Tempted to allow potential problems to go unaddressed : As illustrated in this week's readings, sometimes supervisors are tempted to allow potential problems to go unaddressed

Using the general social survey dataset : Create a research question using the General Social Survey dataset that can be answered by multiple regression.

Middle management as an accounts representative : Jakaya works for Wassira Enterprises in middle management as an accounts representative.

Relationship between dividend and capital gains yields : Of what interest to investors is the changing relationship between dividend and capital gains yields over time?

Describe the customer communication style : Identify and describe the selected communication style. describe the customer's communication style.

Developing pricing and marketing strategy for comanapracil : You have been tasked with developing a pricing and marketing strategy for Comanapracil.

About the consumer behavior : A subculture is a group whose members share significant beliefs and common expe... Consumer Behavior

Purpose of developing stakeholder management strategy : What is the main purpose of developing a stakeholder management strategy? When should it be done? Who should see the results?

User Account

All Pages