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What are dividend yield and capital gains yield

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Reference no: EM131877421

Consider a stock that is planning to pay a dividend of $3 at the end of this year. After that,dividends will grow at a fixed rate of 4.5% per year indefinitely. The required return on the stock is 11%.

a.What is the value of the stock today, in 5 years, and in 8 years?

b. What are dividend yield and capital gains yield yield this year, in 5 years, and in 8 years?

Reference no: EM131877421

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