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    Finance: Calculate the Stock's Capitalization Rate

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    Dividend and Capital Gain Yield

    A stock with a current price of $25 / share pays a current annual dividend of $2 which is expected to increase by 4% per year. What is the stock's capitalization rate?

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    Solution Preview

    Stocks capitalization rate is the required return on the stock. Since the growth rate is expected to ...

    Solution Summary

    The solution explains how to calculate the stock's capitalization rate. Formulas and calculations are provided.