What is the expected capital gains yield

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Q 1: The Exotic Emig Company has a required rate of return of 9% and is expected to grow at a constant rate of 4% in the foreseeable future. If the firm's last dividend paid was $3, what is the expected capital gains yield?

Q 2: The Paper Peddler Plumbing Company has a historical growth in its free cash flows of 3% with little variability. With the addition of a new plant and equipment, however, you expect free cash flows will grow 7% in Year 1, 5% in Year 2, and 4% thereafter. The firm's last free cash flow was $100,000. The firm has a required rate of return of 10%. What is the expected value of the firm's operations?

Reference no: EM133111721

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