Question

You expect Spring Hill stock to pay a $1.23 dividend one year from now, and you expect its stock price to be $19.74 immediately after it pays the dividend. today's stock price is $20.57, what is Spring Hill's expected dividend yield? Enter your answer as a decimal and show four decimal places. For example, if your answer is 2.54%, enter .0254.

Answer 1

The expected dividend yield of Spring Hill stock can be calculated by dividing the expected dividend by the current stock price. In this case, the expected dividend is $1.23 and the current stock price is $20.57. So the dividend yield would be 0.0599, or 5.99% as a decimal.

Step-by-step explanation:

The expected dividend yield of Spring Hill stock can be calculated by dividing the expected dividend by the current stock price. In this case, the expected dividend is $1.23 and the current stock price is $20.57. So the dividend yield would be:

Dividend Yield = Dividend / Stock Price = $1.23 / $20.57 = 0.0599

Therefore, the expected dividend yield of Spring Hill stock is 0.0599, or 5.99% as a decimal.