Compute the expected dividend

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Reference no: EM131309812

1. You are an investor in company which is an auto parts supplier. They will pay a dividend next year of $0.80 per share and are expected to grow at an annual rate of 2%. The price of the stock is currently $37.24. What is the dividend yield?

2. Why diversify and what can you hope to achieve in terms of investments?

3. Suppose that today's stock price is $75.19. If the required rate on equity is 17.2% and the growth rate is 7.6%, compute the expected dividend (i.e. compute D1)

Reference no: EM131309812

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