Bermuda Corporation has a stock price of RM32.35 per share. The last dividend was RM3.42 (D0 = RM3.42). The long-run growth rate for the company is a constant 7 percent. What is the company's capital gains yield and dividend yield? A. Capital gains yield = 10.57%; Dividend yield = 7.00% B. Capital gains yield = 7.00%; Dividend yield = 10.57% C. Capital gains yield = 7.00%; Dividend yield = 4.31% D. Capital gains yield = 7.00%; Dividend yield = 11.31%
Added by Arvis C.
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So, the capital gains yield is 7%. Second, the dividend yield is calculated as the dividend divided by the stock price. So, the dividend yield is RM3.42 / RM32.35 = 0.1057 or 10.57%. Show more…
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