Questions: Krell Industries has a share price of 21.14 today. If Krell is expected to pay a dividend of 0.72 this year and its stock price is expected to grow to 24.07 at the end of the year, what is Krell's dividend yield and equity cost of capital? The dividend yield is %. (Round to two decimal places.)

Krell Industries has a share price of 21.14 today. If Krell is expected to pay a dividend of 0.72 this year and its stock price is expected to grow to 24.07 at the end of the year, what is Krell's dividend yield and equity cost of capital?

The dividend yield is %. (Round to two decimal places.)

Transcript text: Krell Industries has a share price of $\$ 21.14$ today. If Krell is expected to pay a dividend of $\$ 0.72$ this year and its stock price is expected to grow to $\$ 24.07$ at the end of the year, what is Krell's dividend yield and equity cost of capital? The dividend yield is $\square$ \%. (Round to two decimal places.)

Solution

Solution Steps

Step 1: Calculate the dividend yield

The dividend yield is calculated by dividing the annual dividend per share by the current share price. In this case, the annual dividend is $0.72 and the current share price is $21.14.

Dividend yield = (0.72 / 21.14) * 100%

Step 2: Calculate the result

Dividend yield = 0.03405 * 100% = 3.405%

Step 3: Round to two decimal places

The question asks for the answer to be rounded to two decimal places.

Dividend yield = 3.41%