00 Return on Common Stock You buy a share of The Ludwig Corporation stock for $19.40. You expect it to pay dividends of $1.08, $1.1448, and $1.2135 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $23.11 at the end of 3 years. a. Calculate the growth rate in dividends. Round your answer to two decimal places. % b. Calculate the expected dividend yield. Round your answer to two decimal places. % c. Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock's expected total rate of return (assume market is in equilibrium with the required rate of return equal to the expected return)? Do not round intermediate calculations. Round your answer to two decimal places. % Icon Key Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 9% rate. Dozier's weighted average cost of capital is WACC = 16%. Year 1 2 3 Free cash flow (millions of dollars) -$20 $30 $40 a. What is Dozier's horizon value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answer to two decimal places. $ million b. What is the current value of operations for Dozier? Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answer to two decimal places. $ million. c. Suppose Dozier has $10 million in marketable securities, $100 million in debt, and 10 million shares of stock. What is the intrinsic price per share? Do not round intermediate calculations. Round your answer to the nearest cent. $ per share mework Nonconstant Dividend Growth Valuation Conroy Consulting Corporation (CCC) has a current dividend of Do- $2.50. Shareholders require a 10% rate of return. Although the dividend has been growing at a rate of 29% per year in recent years, this growth rate is expected to last only for another 2 years (90.1 91.2-29%). After Year 2, the growth rate will stabilize at 0-4 %. a. What is CCC's stock worth today? Do not round intermediate calculations. Round your answer to the nearest cent. $ b. What is the expected stock price at Year 17 Do not round intermediate calculations. Round your answer to the nearest cent. c. What is the Year 1 expected (1) dividend yield, (2) capital gains yield, and (3) total return? Do not round intermediate calculations. Round your answers to two decimal places. Dividend yield: Capital gains yield: % 1% Total return: % d. What is its expected dividend yield for the second year? The expected capital gains yield? The expected total return? Do not round intermediate calculations. Round your answers to two decimal places. Dividend yield: % Capital gains yield: % Total return: % Check My Work