Question

Asked Nov 3, 2019

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%

Step 1

**Calculation of dividend yield:**

**Answer:**

Dividend yield is **5.0%**

**Meaning:**

Dividend yield is shown as a percentage and determined by multiplying the dollar value of dividends paid in a given year by one share’s dollar value.

Step 2

**Calculation of required rate of...**

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