Determining the dividend yield of abc corporation


Assignment:

ABC Corporation just paid a dividend of $ 2.00 per share. A Wall Street Analyst predicts that the current dividend is likely to increase at constant rate of 8% per year for indefinite period. An investor wants to make a minimum return of 12% by investing in Shares of ABC. If sells these shares after one year, his Dividend yield % would be:

a. 12.00%

b. 20.00%

c. 4.00%

d. 8.00%

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Corporate Finance: Determining the dividend yield of abc corporation
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