Assume that temp force is a constant growth company whose

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Assume that Temp Force is a constant growth company whose last dividend (D0, which was paid yesterday) was $2.00 and whose dividend is expected to grow indefinitely at a 6% rate.

(1) What is the firm's expected dividend stream over the next 3 years?

(2) What is the firm's current stock price?

(3) What is the stock's expected value 1 year from now?

(4) What is the expected dividend yield, the capital gains yield, and the total return during the first year?

Sam Strother and Shawna Tibbs are senior vice presidents of Mutual of Seattle. They are co-directors of the company's pension fund management division, with Strother having responsibility for fixed income securities (primarily bonds) and Tibbs being responsible for equity investments. A major new client, the Northwestern Municipal League, has requested that Mutual of Seattle present an investment seminar to the mayors of the represented cities, and Strother and Tibbs, who will make the actual presentation, have asked you to help them.

Reference no: EM13478238

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