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What is expected capital gains yield

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Reference no: EM133305621

Question 1.

The next dividend payment by Exponential Continued Growth, Inc., will be $3.20 per share. The dividends are anticipated to maintain a growth rate of 6 percent, forever. If ECG stock currently sells for $63.50 per share, what is the required return?

Required return= (3.2/63.5)+.06 =11.04%

Question 2. For the company in the previous problem, what is the dividend yield? What is the expected capital gains yield?

Reference no: EM133305621

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