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2 . You own shares of Cyberdyne Systems. This morning, those shares were trading for $ 6 0 per share. Lockheed Martin announces that they

2. You own shares of Cyberdyne Systems. This morning, those shares were trading for $60 per share. Lockheed Martin announces that they plan to purchase Cyberdyne Systems by buying all outstanding shares of Cyberdyne Systems for $70 one year from today. Additionally, Cyberdyne had previously announced a dividend to be paid one year from today for $3 per share. The dividend will be paid before Lockheed Martin closes the deal. Assume that with certainty Lockheed Martin will purchase Cyberdyne.
a. What is the expected dividend yield of Cyberdyne?
b. What is the expected capital gain rate of Cyberdyne?
c. What is the expected return of owning Cyberdyne stock over the next year?
d. If the expected return of Cyberdyne did not change after the purchase announcement, what do you expect the price of Cyberdyne to be 6 months from now?

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