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Dividend and capital gains yield in each year

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Assume that Bon Temps is a constant growth company whose last dividend (D, which was paid yesterday) was $2.00 and whose dividend is expected to grow indefinitely at a 4% rate. assume that Bon Temp’s earnings and dividends are expected to decline at a constant rate of 4% per year, that is, g=-4%. Why would anyone be willing to buy such a stock, and at what price should it sell? What would be its dividend and capital gains yield in each year?

Reference no: EM131578553

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