Suppose a company has net income of 1000000 and a plowback


Suppose a company has net income of 1,000,000 and a plowback ratio of 40%. There are 50,000 shares of stock outstanding. The company plans to increase dividends by 22% each year for the next 2 years and apply a 2.25% growth rate to dividends each year indefinitely. The required return is 13%. What will this year's dividend be? What should the stock price be today? What is this year’s dividend yield? What is this year's capital gains yield? What will the stock be in 2 years? What will dividend yield and capital gains yield be in 2 years?

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Financial Management: Suppose a company has net income of 1000000 and a plowback
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