Question
Dexter International is expected to pay a dividend next year of $2.10 per share. Dexter has a beta of 1.00 and the market rate of return is 12% and the risk free rate is 3%. What is the dividend yield if an investor purchases the stock at $41.68 a share?
 
Group of answer choices
5.0%
6.0%
9.0%
12.0%
Expert Solution

Want to see the full answer?

Check out a sample Q&A here
Blurred answer
Students who’ve seen this question also like:
Corporate Fin Focused Approach
Corporate Fin Focused Approach
5th Edition
ISBN: 9781285660516
Author: EHRHARDT
Publisher: Cengage
Not helpful? See similar books
Corporate Fin Focused Approach
Corporate Fin Focused Approach
Valuation Of Stocks And Corporations. 2P
marketing sidebar icon
Want to see this answer and more?
Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*
*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.

Related Finance Q&A

Find answers to questions asked by students like you.

Q: Dexter International is expected to pay a dividend next year of $2.10 per share. Dexter has a beta…

A: Dividend yield: Dividend yield is shown as a percentage and determined by multiplying the dollar…

Q: Yharnam Co. is expected to pay a dividend of D1 = $1.40 per share at the end of the year, and that…

A: Using CAPM,  Expected Return = Risk free rate + beta * market risk premium Expected Return = 3.90% +…

Q: Econet Company is expected to pay a dividend in year 1 of $2, a dividend in year 2 of $3, and a…

A: Cost of equity = Risk free rate + (Beta*Market risk premium) Cost of equity = 6% + (0.625*8%) Cost…

Q: The Airasiang Berhad is expected to pay a dividend of RM1.25 per share at the end of the year, and…

A: Hello. Since you have posted multiple questions and not specified which question needs to be solved,…

Q: Xila-Fone Corp. expects to earn $4.00 per share next year, with an expected  payout of 30%.…

A: in this problem you have to calculate required rate of return and than use dividend discount model…

Q: MCK Bhd paid a dividend of RM2 per share last year. The growth rate in dividend is expected to be 4%…

A: A model that helps to evaluate the value of the stock with the assumption that the dividend will…

Q: Stewart Industries expects to pay a $3.00 per share dividend on its common stock at the end of the…

A: Stock Price is present value of all benefits that stock will generate over investment period…

Q: Mackenzie Company has a price of $38 and will issue a dividend of $2.00 next year. It has a beta of…

A: Current Price (Po) =$38 Dividend for next year (D1) = $2.00 Beta = 1.3 Risk Free Rate (Rf) = 5.3%…

Q: A. MCK Bhd paid a dividend of RM2 per share last year. The growth rate in dividend is expected to be…

A: Current Dividend = 2 Dividends expected over the next 4 years : Year Dividend Working 1 2.08…

Q: A. MCK Bhd paid a dividend of RM2 per share last year. The growth rate in dividend is expected to be…

A: The dividend discount model is the model of stock valuation that assumes that the current worth of a…

Q: Mackenzie Company has a price of $37 and will issue a dividend of $2.00 next year. It has a beta of…

A: Using CAPM

Q: Dyer Furniture is expected to pay a dividend of D1 = $1.65 per share at the end of the year, and…

A: The Gordon Growth Model or dividend discount model is a method of valuing a company's stock price…

Q: Mackenzie Company has a price of $34 and will issue a dividend of $2.00 next year. It has a beta of…

A: The cost of equity can be computed using the CAPM model which uses a single factor which is the…

Q: Dyer Furniture is expected to pay a dividend of D1 = $1.25 per share at the end of the year and that…

A: In the given question we need to compute the current stock price of Dyer. As per Dividend Discount…

Q: The Francis Company is expected to pay a dividend of D1 = $1.25 per share at the end of the year,…

A: D1 = $ 1.25 Growth rate (G) = 6% Risk free rate = 4% Risk premium = 5.50% Beta = 0.85 Required…

Q: ou are considering an investment in the common stock of Keller Corp. The stock is expected to pay a…

A: Cost of equity is the minimum rate of return required to earn on the equity capital in such a manner…

Q: Sheltech Real State company is currently paying dividnd of Tk 3.75 per share, which is expected to…

A: Dividend discount model- It is a method of valuing a company's stock price based on the logic that…

Q: Birkin Systems is expected to pay a dividend of D1 = $2.00 per share at the end of the year, and…

A: Expected Return = Risk free rate + beta * market risk premium Expected Return= 4% + 1.20 * 6%…

Q: The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 4% per year in the…

A: Click to see the answer

Q: The future earnings, dividends, and common stock price ofCallahan Technologies Inc. are expected to…

A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts…

Q: Your broker has recommended that you purchase stock in Beacan, Inc. Beacan recently paid its annual…

A: Given information: Annual dividend is $14.00 ROE is 15% Retention ratio is 50%, pay-out is 50% Stock…

Q: Suppose that the risk-free rate is 7.00% per annum and that the market risk premium is 9.40% per…

A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…

Q: The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 7% per year in the…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 8% per year in the…

A: Cost of equity is the rate of return that is expected by an investor or the shareholders who have…

Q: Todd Mountain Development Corporation is expected to pay a dividend of $3 in the upcoming year.…

A: Click to see the answer

Q: AC&DC Company will be worth $135 per share one year from now. This company has a beta of 2.3. The…

A: Share price next year (P1) = $135 Risk free rate (Rf) = 5.5% Market risk premium (Rm - Rf) = 7% Beta…

Q: You are considering an investment in MBC Group's stock, which is expected to pay a dividend of $3.96…

A: The question can be answered by determining the expected return for the stock using the capital…

Q: Preferred Products has issued preferred stock with an $8 annual dividend that will be paid in…

A: The only information given here is that the annual dividend on the preferred stock was $8 which will…

Q: Preferred products has issued preferred stock with an annual dividend of $7.00 that will be paid in…

A: annual dividend = 7 Time = perpetuity Discount rate = 10%   Assuming face value to be =100

Q: King Waterbeds has an annual cash dividend policy that raises the dividend each year by 6%. The most…

A: The intrinsic value of stock refers to the present value of future cash flows expected from the…

Q: Low Fly Airline is expected to pay a dividend of $7 in the coming year. Dividends are expected to…

A: As per CAPM, Required return = risk free rate + beta * (market return - risk free rate) = 6% + 3.00…

Q: You are considering an investment in Eagle Corporation's stock, which is expected to pay a dividend…

A: GIVEN, Rf=3.3% beta = 0.9 Rm= 5% therefore,  from CAPM model,…

Q: You wish to earn a rate of return of 13% on each of two shares, A and B. Share A is expected to pay…

A: Computation as follows: Hence, the share price of A is $50.

Q: You are told by your investment advisor that Laduma Co. is expected to earn R5 per share next year,…

A: Formulas:

Q: The dividend per share next year of EMP Ltd is expected to be $1.20, and the required rate of return…

A: given, D1= $1.20 r=12% g2= 20% g3=15% g=8%

Q: Please give handwritten

A: The price of preferred stock in perpetuity = Annual dividend/discount rate

Q: are aligned? Discuss. ) Prima Corporation's dividend per share next year is expected to be RM3.02…

A: Shareholder Stake refers to a Shareholder's equity interest in the Debtor. Shareholder Interest…

Q: The owners of Sitty Inc need a return of 12% pa. The current performance of the firm leads to the…

A: 1 : The 12% return if the share price is 22/share = 22 * 12% = 2.64 That means on investing 22…

Q: ABC Company has just paid a dividend of $2.43 per share, and its dividend is expected to grow at a…

A: Dividend Growth Model Dividend Growth Model is used for valuation of  stock’s intrinsic value or…

Q: Dyer Furniture’s current dividend is $2.00 per share, and the dividend is expected to grow at a…

A: If Capital Asset Price Model Hold good, Return on Stock = Risk free Rate  + (Market Rate - Risk Free…

Q: I=m Eating Restaurants is expected to pay a dividend of $5.00 per share on its commonstock in one…

A: a.The market price of a share of stock can be calculated with the help of below expression:

Q: he earnings, dividends, and stock price of Shelby Inc. are expected to grow at 8% per year in the…

A: Given: Growth rate is 8% Current stock price is $28.50 per share Last dividend (D0) is $2.50 Current…

Q: A Share is currently selling for Rs.65. The company is expected to pay a dividend of Rs.2.50 on the…

A: Cost of equity is the minimum rate of return required to earn on the equity capital in such a manner…

Q: Preferred Products has issued preferred stock with an annual dividend of $8.25 that will be paid in…

A: The perpetuity is the never ending time period for the valuation of price of preferred shares. The…

Q: Victoria Company’s beta is exactly 2, and the market risk premium is 8%, with a risk-free rate of…

A: The question is related to Capital Asset Pricing Model and Gorden's Model. First we will calculate…

Q: he expected dividend of Sony Company for next year has the following probability distributions: 30%…

A: Market price per share  = expected dividend / required arte   Expected dividend  =  2* 30% + 2.890…

Q: Management has recently announced that expected dividends for the next four years will be as…

A: Formulas: Expected return = Risk free rate + (beta*(market rate - risk free rate))

Q: Answer all the questions with show working.  if the dividend already paid at RM1.75, the growth…

A: Computation of the expected total return for the upcoming year is shown:

Q: Suppose the risk-free rate of return is 3.5 percent and the market risk premium is 7 percent. Stock…

A: Capital Asset Pricing Model determines the rate of return of a certain asset based on the…

Q: Suppose Facebook Inc. currently pays $1 dividend. Analysts project that the dividend for the next…

A: The price calculation of share we consider all dividend per share and cost of equity and growth rate…

Knowledge Booster
Finance
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Recommended textbooks for you
  • Corporate Fin Focused Approach
    Finance
    ISBN:9781285660516
    Author:EHRHARDT
    Publisher:Cengage
    Intermediate Financial Management (MindTap Course...
    Finance
    ISBN:9781337395083
    Author:Eugene F. Brigham, Phillip R. Daves
    Publisher:Cengage Learning
    Financial Management: Theory & Practice
    Finance
    ISBN:9781337909730
    Author:Brigham
    Publisher:Cengage
  • EBK CONTEMPORARY FINANCIAL MANAGEMENT
    Finance
    ISBN:9781337514835
    Author:MOYER
    Publisher:CENGAGE LEARNING - CONSIGNMENT
    Fundamentals of Financial Management (MindTap Cou...
    Finance
    ISBN:9781285867977
    Author:Eugene F. Brigham, Joel F. Houston
    Publisher:Cengage Learning
  • Corporate Fin Focused Approach
    Finance
    ISBN:9781285660516
    Author:EHRHARDT
    Publisher:Cengage
    Intermediate Financial Management (MindTap Course...
    Finance
    ISBN:9781337395083
    Author:Eugene F. Brigham, Phillip R. Daves
    Publisher:Cengage Learning
    Financial Management: Theory & Practice
    Finance
    ISBN:9781337909730
    Author:Brigham
    Publisher:Cengage
    EBK CONTEMPORARY FINANCIAL MANAGEMENT
    Finance
    ISBN:9781337514835
    Author:MOYER
    Publisher:CENGAGE LEARNING - CONSIGNMENT
    Fundamentals of Financial Management (MindTap Cou...
    Finance
    ISBN:9781285867977
    Author:Eugene F. Brigham, Joel F. Houston
    Publisher:Cengage Learning