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1 . Assume Evco,Inc., has a stock price of $ 4 8 . 7 2 and will pay a $ 2 . 0 0 dividend

1. Assume Evco,Inc., has a stock price of $48.72 and will pay a $2.00 dividend in one year; its equity cost of capital is 18%. What price must you expect Evco stock to sell for immediately after thefirm pays the dividend in one year to justify its current price? 2. You just purchased a share of SPCC for $95.48. You expect to receive a dividend of $4.59 in one year. If you expect the price after the dividend is paid to be $113.66, what total return will you have earned over the year? What was your dividend yield? Your capital gain rate?

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