What is bae expected capital gains yield

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Problem 1: Investors expect Bae Corporation to pay a dividend of D1 = $2.50 and to grow at a constant rate of 7% per year. The stock sells at a price of $25. What is Bae's expected capital gains yield?

Group of answer choices

Option 1: 6.0%

Option 2: 8.0%

Option 3:  5.0%

Option 4: 7.0%

Option 5: 4.0%

Reference no: EM132753355

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