The required return on a stock is equal to which one of the following if the dividend on the stock decreases by a constant percent per year? O Dividend yield - Capital gains yield O (PO/D1)-8 O (D1/PO)/g O Dividend yield x Capital gains yield Dividend yield + Capital gains yield
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- Given the constant growth dividend valuation model, the expected percentage growth in vau of a stock is equal to the capital gains yield for that stock. Select one: O True O False Previous page Next page Return ti: GeneralThe dividend yield (i.e. D1/P0) is a good measure of the expected return on a common stock under which of the following circumstances? g = 0 g > 0 g < 0 g is expected to remain constant over time under no circumstancesIf Do= $2.25, g (which is constant) = 3.5%, and Po= $44, what is the stock's expected dividend yield for the coming year? Select the correct answer. Oa. 4.15% b. 4.53% O c. 5.29% d. 4.91% O e. 5.67%
- If D1 = $1.25, g (which is constant) = 4.7%, and P0 = $42, what is the stock's expected dividend yield for the coming year? Select the correct answer a. 3.12% b. 2.84% c. 3.40% d. 2.56% e. 3.68%1. The rate at which a stock's price is expected to appreciate (or depreciate) is called the yield. A. current B. total C. dividend D. capital gains 2. The underlying assumption of the dividend growth model is that a stock is worth: A. the present value of the future income that the stock generates. B. the same amount to every investor regardless of his desired rate of return. C. an amount computed as the next annual dividend divided by the market rate of retum. D. an amount computed as the next annual dividend divided by the required rate of return. 3. The total rate of return earned on a stock is composed of which two of the following? 1. current yield II. yield to maturity III. dividend yield IV. capital gains yield A. I and II only B. I and IV only C. II and III only D. III and IV only 4. Which one of the following correctly defines the constant dividend growth model? A. R = (D₁ Po) + g B. Po = (D₁R) + g C. R=(Po Do) + g D. Po = Do ] (R-g) 5. How much are you willing to pay for one…One stock valuation model holds that the value of a share of stock is a function of its futuredividends, and that the dividends will increase at an annual rate which will remain unchangedover time. This stock valuation model is known as the * A.approximate yield model. B.holding period return model. C.constant growth dividend valuation model. D.dividend reinvestment model.
- If D1 = $1.50, g (which is constant) = 2.1%, and PO = $56, what is the stock's expected capital gains yield for the coming year?If D1 = $1.50, g (which is constant) = 6.5%, and P0 = $56, what is the stock's expected capital gains yield for the coming year? Group of answer choices 6.50% 6.83% 7.17% 7.52% 7.90%(3) According to the Dividend-Discount Model Equation, the price of the stock today (Po) is equal to the present value of all of the expected future dividends (e.g., Divi, Div..., Divx) investors will receive, along with the cash flow from the sale of the stock (i.e., Ps) in year N (see, the following Equation). Div Div ₂ + L + 1+FE (1+E)² Po = + PN Div N (1+re)^ *(1+r)^ List three practical challenges (i.e., limitations) when using the Equation to calculate stock price (Po) in practice.
- One stock valuation model holds that the value of a share of stock is a function of its ends will increase at an annual rate which will remain unchangedover time. This stock valuation model is known as the * approximate yield model. holding period return model. constant growth dividend valuation model. dividend reinvestment model.A stock's next expected dividend divided by the current stock price is the: current yield O total yield dividend yield O capital gains yield earnings yield 身What is the rate of return on a stock that currently sells for GH₵ 36 and is expected to sell for GH₵ 40 a year from now? Dividends in the coming year are pegged at GH₵ 4 per share. What are the dividend yield and capital gain component of the return?