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1 2 . A broker offers to sell you shares of Bay Area Healthcare, which just paid a dividend of $ 2 per share. The

12. A broker offers to sell you shares of Bay Area Healthcare, which just paid a dividend of $2 per share. The dividend is expected to grow at a constant rate of 5% per year. The stocks required rate of return is 12%.
A. What is the expected dollar dividend at the end of three years?
B. What would be a price for this stock?
C. What is the expected capital gains yield at the end of the third year?
D. What is the expected total return yield (this is the expected dividend yield + expected capital gains yield) for each of the next three years?

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