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What will be the capital gains yield for the second year

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Reference no: EM133002110

You have the following data regarding a share of stock in a particular firm:

  1. The dividend at the end of the current year is expected to be $4.38/share
  2. The dividend is expected to grow at a constant rate forever
  3. The dividend growth rate is -6.04%
  4. Investors in the stock expect a 20.32% total return from investing in the stock

Problem 1: What will be the capital gains yield for the second year (t=1 to t=2)?

Reference no: EM133002110

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