15 If a stock will pay a dividend of $5.25 in one year and the current market price of $65 with a constant dividend growth rate of 3.5%, determine each of the following: Dividend yield, capital gains yield, total return and the expected stock price in one year. DI $5.25 3.50% Current price $65.00 a) Div yld =D1/PV 8.08% b)capital gains (CG) yield -9 3.50% c) total return RC = (D1/PV) +9 11.58% d) stock price in one year =market price today *(1 +9) Note that the dividend yield (DY) = total return - growth rate 6712 Total return = DY + growth rate Growth rate = Total return - DY This shows us that not only are the dividends expected to grow at a rate of 3.5% per year, but the stock price is also expected to grow at that same rate. - $6728g what t's go here to geth