Question

The next dividend payment by Hoffman, Inc., will be $2.50 per share. The dividends are anticipated to maintain a growth rate of 5.75 percent forever. Assume the stock currently sells for $48.60 per share. a. What is the dividend yield

Answer 1

The dividend yield is 5.14%

Step-by-step explanation:

In order to calculate the dividend yield we would have to calculate the following formula:

Dividend yield=Dividend/Beginning value

According to the given data we have the following:

Dividend=$2.50 per share

Beginning value =$48.60 per share

Therefore, Dividend yield=$2.5/$48.6

Dividend yield=5.14%

The dividend yield is 5.14%