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18 June, 16:59

Walter's dividend is expected to grow at a constant growth rate of 6.50% per year. What do you expect to happen to Walter's expected dividend yield in the future? A. It will stay the same. B. It will increase. C. It will decrease.

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  1. 18 June, 19:49
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    A. It will stay the same.

    Explanation:

    The formula to compute the dividend yield is shown below:

    = (Annual dividend : market price) * 100

    Since in the question, it is given that the expected dividend is growing at the constant growth rate i. e 6.50%, so the expected dividend yield will remain the same in the future.

    As it shows a direct relationship between the growth rate and the dividend yield plus the market price is growing at a steady rate
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