Respuesta :
When a stock currently sells for $50 per share, has an expected return of 15%, and an expected capital appreciation rate of 10%. Then the amount of the expected dividend is $2.5.
The calculation of the amount of expected dividend is shown below.
Expected dividend = (Expected return - Capital appreciation rate) * Selling price
Expected dividend = (15% - 10%) * $50
Expected dividend = 5% * $50
Expected dividend = 0.05 * $50
Thus, Expected dividend = $2.5
What do you mean by dividend?
Dividends are referred to as incentives, which are in the form of payments to shareholders of a company. Dividend refers to a reward, cash or otherwise, that a company gives to its shareholders. Dividends are issued in various forms, such as cash payment, stocks or any other form.
What is the expected capital appreciation?
Capital appreciation refers to the difference between the purchase price and the selling price of an investment made. For instance, if an investor buys a stock for $10 per share, and the stock price rises to $12, the investor has earned $2 in capital appreciation.
Hence, the answer is given and explained above.
To learn more about dividend and capital appreciation here:
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