For the following question, what is the dividend per share?
My answer was 2.585 by saying that 5.5% return must come from the dividend yield and the other 5.5% coming from the capital gains rate. We know P0 is 47 and so D1 must be 2.585. My friend disagrees and says we are after D0 and that we must divide D1 by the Dividend Yield to get D0, which i do not understand. Could someone explain this please?