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Homework answers / question archive / Krell Industries has a share price of $21

Krell Industries has a share price of $21

Finance

Krell Industries has a share price of

$21.22

today. If Krell is expected to pay a dividend of

$0.81

this year and its stock price is expected to grow to

$24.55

at the end of the? year, what is? Krell's dividend yield and equity cost of? capital?

 

a.     The dividend yield is

?(Round to one decimal? place.)

b.     The capital gain rate is

?(Round to one decimal? place.)

c.     The total return is

? (Round to one decimal? place.)

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a) 

Dividend Yield = Expected Dividend/Beginning Value

= $0.81/$21.22

= 3.8%

 

b)

Capital Gain Rate = (Ending Value - Beginning Value)/Beginning Value

= ($24.55-$21.22)/$21.22 

= $3.33/$21.22

= 15.7%

 

c)

Total Return = Dividend Yield + Capital Gain Rate

= 3.8% + 15.7%

= 19.5%

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