bondvaluationenglishedition课程.pptVIP

7.* Zero growth – 2 / .15 = 13.33 Constant growth: 2(1.03) / (.15 - .03) = $17.17 7.* Point out that D1 / P0 is the dividend yield and g is the capital gains yield 7.* 7.* 7.* r = [1.5(1.05)/18.75] + .05 = 13.4% 7.* 8-* Using the DGM to Find R Start with the DGM: 8-* Finding the Required Return - Example Suppose a firm’s stock is selling for $10.50. They just paid a $1 dividend and dividends are expected to grow at 5% per year. What is the required return? R = [1(1.05)/10.50] + .05 = 15% What is the dividend yield? 1(1.05) / 10.50 = 10% What is the capital gains yield? g =5% 8-* Table 8.1 - S