Question

A stock currently sells for $49. The dividend yield is 3.4 percent and the dividend growth rate is 4.7 percent. What is the amount of the dividend to be paid in one year

Answer 1

Answer: $1.67

Step-by-step explanation:

Current price of stock = $49

Dividend yield = 3.4%

Dividend growth rate = 4.7%

To get the amount of the dividend to be paid in one year, we calculate it as:

Dividend yield = Dividend for next period/Current price

=49 × 3.4%

= 49 × 0.034

=$1.67