What will be the dividends and capital gains yield once the


a. XYZ Corporation has been growing at a rate of 20% per year. The growth is expected for another two years and then decline to 6%. If XYZ D0=$1.60 and required rate of return is 10% what is XYZ stock worth today?

b. Say XYZ supernormal growth is expectd to last for 5 years rather than 2 years. How would this affect the price of the stock, dividend yield and capital gains yield? Discuss.

c. What will be the dividends and capital gains yield once the supernormal growth rate ends?

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Financial Management: What will be the dividends and capital gains yield once the
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