What is the of that return in dividends and capital gain


1. Company Y just paid a dividend of $1.50 per share. The dividends are expected to grow for the next 3 years at 6% per year, then grow at 3% per year forever. The required rate of return for LED stock is 10% per year.

a. If you purchased the share of Company y at time 2, hold it for 1 year, what is the return in Company Y stock be? What is the % of that return in dividends and capital gain?

b. What is the ex-dividend* stock price of Company Y at time 3? What does this value mean?

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Financial Management: What is the of that return in dividends and capital gain
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