The prospective dividend yield from an ordinary share is defined as the next expected dividend divided by the current price. A particular share is expected to provide a real rate of return of 5% per annum effective. Inflation is expected to be 2% per annum. The growth rate of dividends from the share is expected to be 3% per annum compound. Dividends will be paid annually and the next dividend is expected to be paid in 6 months’ time. Calculate the prospective dividend yield from the share. in this we have given real rate= 5% j=2% g=3% p= d*(v^(6/12)/(1.02)^6/12 + v^(1.5)*1.03/1.02^1.5+................) = d*v^0.5/1.02^0.5*[1+v*1.03/1.02+..............) d*v^0.5/1.02^0.5* (1/d') =d*v^0.5/1.02^0.5* (1+i'/i') is my correct? and but what value should be taken for i' and v? pls tell me
