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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 Summary

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

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

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