Analize the following The value of the dividend that investors expect corporation B to pa

Analize the following The value of the dividend that investors expect corporation B to pa

Analize the following

The value of the dividend that investors expect corporation B to pay one year from today is taking the difference from the stock prices of the current year and we have to divide it by 1-payout ratio.


120 - 113 / 1 - 0.30
=
7 / 0.7
=
10 So the dividend value for the Corporation B would be 10 in one year.


The dividend rate may be quoted in terms of the dollar amount each share receives (dividends per share, or DPS), or It can also be quoted in terms of a percent of the current market price, which is referred to as the dividend yield. A company's net profits can be allocated to shareholders via a dividend, or kept within the company as retained earnings. A company may also choose to use net profits to repurchase their own shares in the open markets in a share buyback. Dividends and share buy-backs do not change the fundamental value of a company's shares. Dividend payments must be approved by the shareholders and may be structured as a one-time special dividend, or as an ongoing cash flow to owners and investors.

Dividend Definition | Investopedia (Investopedia)
http://www.investopedia.com/terms/d/dividend.asp