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Payne amp; Rennie Company has paid a dividend of DIV0=$3. Due to a new product, Payne amp; Rennie expects is short-run growth rate in dividends to...
Payne & Rennie Company has paid a dividend of DIV0=$3.00. Due to a new product, Payne & Rennie expects is short-run growth rate in dividends to equal 20% annually for the next 2 years. After this time, growth is expected to return to the long-run constant rate of 10 % The required rate of return on the company's equity is 15%. What should the dividend yield (DIV/P0) be today?
a. 2.33%
b. 3.93%
c. 4.60%
d. 10.00%
e. 7.54%