Issue common stock of rm50 per share with dividend yield of 5%
Growth rate =6%
Tax rate= 40%
To calculate the dividend yield of the common stock, we can use the formula:
Dividend Yield = Dividend per Share / Stock Price
Here, the dividend per share can be calculated by multiplying the stock price by the dividend yield.
Given:
Stock Price = RM50 per share
Dividend Yield = 5%
Dividend per Share = Stock Price * Dividend Yield
= RM50 * 5%
= RM2.50
Now, to calculate the growth rate of the stock, we can use the formula:
Growth Rate = Retained Earnings / Equity
To find the retained earnings, we can multiply the dividend per share by the number of outstanding shares. Let's assume the number of outstanding shares is "N".
Retained Earnings = Dividend per Share * N
Considering the information given, we have a dividend per share of RM2.50. So, to calculate the retained earnings, we need to know the number of outstanding shares.
Similarly, to calculate the equity, we can consider the formula:
Equity = Stock Price * N
Again, we need to know the number of outstanding shares to calculate the equity.
So, with the given information, we cannot directly calculate the growth rate and tax rate. We need additional information like the number of outstanding shares to compute these values.