Suppose a company has net income of 1000000 and a plowback


Suppose a company has net income of $1000,000 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 then apply a 2.25% growth rate to dividends each year indefinitely. The required return is 13%

What should the stock price be today?

What is this year's deviend yield? what is this year's capital gains yield?

What will the stock price 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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