If todays dividend=$2.00, g(which is constant)=6%,and todays

[GeniusDUH]

price=$40,what is the stock EDY t=0 to t=1? If D0 (today's dividend) = $2.00, g (which is constant) = 6%, and P0 (today's price) = $40, what is the stock’s expected dividend yield from t=0 to t=1?

[EJMA (Philippines)]

Cost of Capital = 11% (do this by substitution using the Dividend Growth Model (DGM))

DGM = D1 / (required return - growth rate)

D1(dividend next year) = $2 x 1.06 = $2.12

P1(stock price next year) = $2.12 / (11% - 6%)
P1 = $42.40

Dividend Yield (next year) = $2.12 / $42.40 = 5%