Fair value of the constant growth stock valuation model

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1. Suppose a common stock pays dividends at the end of each period and the stock has just paid a dividend in the amount of $2.1. If the stock's dividend growth rate is 4.7-percent per period and the discount rate is 9.2-percent per period, what is the expected return from capital gain in the next period based on the fair value from the constant growth stock valuation model. Please show the work.

2. Suppose a stock pays dividends at the end of each period and a $2 dividend has just been paid. If the dividend growth rate is 3-percent per period and the discount rate is 10.8-percent per period, what is the dividend yield expected over the next period based on the fair value of the constant growth stock valuation model. Please show the work

Reference no: EM131067982

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