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calculate the next annual dividend payment for stock currently selling for $50 per share. with a
16% expected total return and a 10% expected constant growth rate?
Solution
Expected return=(D1/Current price)+Growth rate
0.16=(D1/50)+0.1
Hence D1=(0.16-0.1)*50
which is equal to
=$3=next annual dividend payment.

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calculate the next annual dividend payment for stock currently selli.pdf

  • 1. calculate the next annual dividend payment for stock currently selling for $50 per share. with a 16% expected total return and a 10% expected constant growth rate? Solution Expected return=(D1/Current price)+Growth rate 0.16=(D1/50)+0.1 Hence D1=(0.16-0.1)*50 which is equal to =$3=next annual dividend payment.