What is the firms expected dividend stream over the next 3


Assume that Bon Temps is a constant growth company whose last dividend (D 0 , which was paid yesterday) was $2.00 and whose dividend is expected to grow indefinitely at a 4% rate.

1. What is the firm’s expected dividend stream over the next 3 years?

2. What is its current stock price?

3. What is the stock’s expected value 1 year from now?

4. What are the expected dividend yield, capital gains yield, and total return during the first year?

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Financial Management: What is the firms expected dividend stream over the next 3
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