The required return on this firm stock increased

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Reference no: EM132057863

1. The Johnston Company will pay an annual dividend of $2.60 next year. The company has increased its dividend by 2.8 percent a year for the past twenty years and expects to continue doing so. What will a share of this stock be worth 10 years from now if the required return is 11 percent?

$41.79

$31.71

$24.83

$40.65

$32.60

2. Sun Tans pays a constant annual dividend. Over the past year, the required return on this firm's stock increased. Given this information you know that over the past year:

the capital gains rate had to decrease.

the stock price increased and the capital gains yield decreased.

the capital gains rate had to increase.

the stock price had to decrease.

the stock price had to increase.

Reference no: EM132057863

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