Problem:
A broker offers to sell you shares of Bay Area Healthcare, which just paid a dividend of $2 per share. The dividend is expected to grow at a constant rate of 5% per year. The stock's required rate of return is 12%.
Required:
Question 1: What is the expected dollar dividend yield after one year?
Question 2: What is the expected total return after one year?
Note: Please provide equation and explain comprehensively and give step by step solution.