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? A) 6.50% B) 6.83% C) 7.17% D) 7.52% E) 7.90%

Name: If D 1 = $1.50, g (which is constant) = 6.5%, and P 0 = $56, what is the stock's expected capital gains yield for the coming year? A) 6.50% B) 6.83% C) 7.17% D) 7.52% E) 7.90%
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Question

Quizplus · Accepted Answer

The expected capital gains yield is equal to the constant growth rate, g, which is 6.5%.

If D1 = $1

If D₁ = $1