Eastbrook Homes currently pays an annual dividend of 135 and

Eastbrook Homes currently pays an annual dividend of $1.35 and plans on increasing that amount by 2.5 percent each year. Valley View Homes currently pays an annual dividend of $1.20 and plans on increasing its dividend by 3 percent annually. Given this information, you know for certain that the stock of Eastbrook Homes\' has a higher  ______  than the stock of Valley View Homes.

Solution

Given this information, it is certain that the stock of Eastbrook Homes\' has a higher capital gains yield than the stock of Valley View Homes.