Compute dividend yield and capital gain yield for each year

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Reference no: EM13113781

1. Stocks

Toy Time's common stock's annual dividend for the next three years is expected to be $2. Thereafter, the dividend is expected to grow 4% per year. Stocks of Toy Time's risk are expected to earn 11% per year.

a. calculate the share price today at the beginning of each of the next 4 years.

c. Calculate the dividend yield and capital gain yield for each year.

d. Does the dividend yield plus the capital gain yield equal to the expected return each year? Briefly explain.

Reference no: EM13113781

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