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1. (15 percent) XYZ Inc. is experiencing rapid growth. Earnings and dividends are expected to grow at a rate of 16% during the next 2

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1. (15 percent) XYZ Inc. is experiencing rapid growth. Earnings and dividends are expected to grow at a rate of 16% during the next 2 years, at 12% the following year, and at a constant rate of 8% during Year 4 and thereafter. Its last dividend was $1.55, and its required rate of return is 12%. a. Calculate the value of the stock today. b. Calculate P1 and P2 (Prices for Year 1 and Year 2). c. Calculate the dividend and capital gains yields for Years 1,2, and 3

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