Problem 8-3 Stock Values [LO1] The next dividend payment by Blue Cheese, Inc., w
ID: 2642262 • Letter: P
Question
Problem 8-3 Stock Values [LO1]
The next dividend payment by Blue Cheese, Inc., will be $2.00 per share. The dividends are anticipated to maintain a growth rate of 6 percent forever. The stock currently sells for $40 per share.
What is the dividend yield? (Round your answer to 2 decimal places. (e.g., 32.16))
The next dividend payment by Blue Cheese, Inc., will be $2.00 per share. The dividends are anticipated to maintain a growth rate of 6 percent forever. The stock currently sells for $40 per share.
Explanation / Answer
Hi, Please find the answers as follows: Dividend Yield = 2/40 = 5% Capital Gains Yield = (40-2)/40 = 95% Thanks