What should be the current dividend per share

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Question 1: Assume an XYZ firms stock currently is trading at $ 63 per share with a required rate of return of 10.5 %. You are aware that a total return on the stock is evenly divided between dividend yield and capital gains. If XYZ firms policy is to maintain the constant growth rate in its dividend, what should be the current dividend per share in this case?

Question 2: Assume the following scenario: MEMC firm recently paid a dividend of AED 2.65 on its share. It is expected that growth rate in the dividend will be 4.5 % per year infinitely with the required rate of return of 15 % for the first three years, followed by 13% in the next three years and 11% onwards. Given the above information, what is the stock price today

Reference no: EM132600081

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