Suppose you know that a companys stock currently sells for $47 per share and the

required return on the stock is 11 percent. You also know that the total return on the stock
is evenly divided between a capital gains yield and a dividend yield. If its the companys
policy to always maintain a constant growth rate in its dividends, what is the current
dividend per share
Given Dividend Yield = 11/2 = 5.5
We know
(Dividend in One Year)/Current Price= .055
D1= .055*47
D1=2.585
D0 (Current Dividend) = 2.585/(1.055)= $2.45