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Dividend per share

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Suppose you know that a company's stock currently sells for $60 per share and the required return on the stock is 15 percent. You also know that the total return on the stock is evenly divided between capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?

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Solution Summary

Calculates current dividend per share, given stock price, required return on the stock, the fact that the total return on the stock is evenly divided between capital gains yield and a dividend yield and that it's the company's policy to always maintain a constant growth rate in its dividends.

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Current stock price= Po= $60
Required return = 15%
Out of which
dividend ...

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