What is the share price at the end of the first year

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Miniscule Computer Chips Incorporated is experiencing a period of growth. Earnings and dividends are expected to grow at a rate of 6 % during the next two years, 5.5 % in the third year, and at a constant rate of 3% thereafter. Miniscule's last dividend was $1.15, and the required rate of return on the shares is 7%.

Required:

Problem a) What is the price of Miniscule Computer Chips shares today? (Timeline required)

Problem b) What is the share price (estimated) at the end of the first year?

Problem c) What dividend yield, capital gains yield, and total yield, should an investor in this company expect for the first year?

Reference no: EM132808048

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