Consider a stock that most recently paid a dividend of 075, Financial Management

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Consider a stock that most recently paid a dividend of 075

Consider a stock that most recently paid a dividend of $0.75. The company plans toincrease dividends by 50% each year for the next 3 years, then by 20% each year for 4years, and then level off to a permanent growth rate in dividends of 6%.

a. If the required return for this stock is 11%, what is the value of the stock today?

b. What are dividend yield and capital gains yield this year?

c. What will be the value of the stock in 7 years?

d. What will be the dividend yield and capital gains yield in 7 years?

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Financial Management: Consider a stock that most recently paid a dividend of 075

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Financial Management: Consider a stock that most recently paid a dividend of 075

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