Suppose you know that a company's stock currently sells for $51.48 per share and the required return on the stock is 6.13 percent. You also know that the total return on the stock is evenly divided between capital gains yield and dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? Answer to two decimals.

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 79E: Ratio Analysis MJO Inc. has the following stockholders equity section of the balance sheet: On the...
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Suppose you know that a company's stock currently sells for $51.48 per share and the required
return on the stock is 6.13 percent. You also know that the total return on the stock is evenly divided
between capital gains yield and dividend yield. If it's the company's policy to always maintain a
constant growth rate in its dividends, what is the current dividend per share? Answer to two decimals.
Transcribed Image Text:Suppose you know that a company's stock currently sells for $51.48 per share and the required return on the stock is 6.13 percent. You also know that the total return on the stock is evenly divided between capital gains yield and dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? Answer to two decimals.
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