Question: China S. Construction Company is in the business of building electrical power plants in eastern United States. Jack Godell & rest of the board members of the company just announced a $4 per share dividend on the company's common stock to be paid in one year. Because quality of some of its recent projects is under attack by investigative television reporters, expected constant dividend growth rate is only estimated to be 1%. The required rate of return for similar stocks in this industry is 16%.
[A] Calculate the present value of the expected dividends from one share of China S. Construction's common stock?
[B] Calculate the stock's dividend yield (D1/P0) Note: The 1 & 0 are smaller numbers, could not be typed that way though.