Stock expected capital gains yield


Problem:

If D1 = $1.50, g (which is constant) = 7.5%, and P0 = $56, what is the stock's expected capital gains yield for the coming year?

  • 6.50%
  • 6.83%
  • 7.17%
  • 7.5%

Note: Be sure to show how you arrived at your answer.

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Finance Basics: Stock expected capital gains yield
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