Question

23 If Investor Required Return Is 20% And Capital Gain Is 8% How Much Dividend Company Should Pay?

Answer 1

If Investor Required Return Is 20% And Capital Gain Is 8% How Much Dividend Company Should Pay?

returns from investing = ( capital gains + dividends ) divided by original purchase price

returns from investing = 0.2

capital gains =0.08

dividends = returns from investing - capital gains = $0.2-0.08=0.12=12\%$