Transcribed Image Text
Consider four different stocks, all of which have a requiredreturn of 18 percent and a most recent dividend of $3.55 per share.Stocks W, X, and Y are expected to maintain constant growth ratesin dividends for the foreseeable future of 11.5 percent, 0 percent,and –6 percent per year, respectively. Stock Z is a growth stockthat will increase its dividend by 20 percent for the next twoyears and then maintain a constant 13.5 percent growth rate,thereafter. What is the dividend yield for each of these four stocks?(Do not round intermediate calculations and enter youranswers as a percent rounded to 2 decimal places, e.g.,32.16.) DividendyieldStockW%Stock X%Stock Y%Stock Z% What is the expected capital gains yield for each of these fourstocks? (A negative answer should be indicated by a minussign. Leave no cells blank - be certain to enter "0" whereverrequired. Do not round intermediate calculations and enter youranswers as a percent rounded to 2 decimal places, e.g.,32.16.) Capitalgains yieldStockW%Stock X%Stock Y%Stock Z%
