Use the following information to answer the question(s)below.
Rearden Metals has a current stock price of $30 share,is expected to pay a dividend of $1.20 in one year,and its expected price right after paying that dividend is $33.
-Rearden's expected capital gains yield is closest to:
A)4.0%.
B)6.4%.
C)8.2%.
D)10.0%.

Question

Quizplus · Accepted Answer

The expected capital gains yield is calculated as the change in stock price divided by the initial stock price. The expected price change is $33 - $30 = $3. The capital gains yield is $3 / $30 = 0.10 or 10.0%.

Use the Following Information to Answer the Question(s)below