What is the stock dividend yield in six years from now

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Problem 1: A stock is expected to pay a year-end dividend of $4.00 a share. Due to negative industry growth, the dividend is expected to decrease 3 percent a year forever. The company's beta is 1.5, risk free rate is 2% and risk premium for market portfolio is 7 percent. What is this stock dividend yield in six years from now? Assume the market is in equilibrium. Please show your formula and calculations in excel.

Reference no: EM132911289

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