3. The treasurer is concerned that ABC doesn't have enough cash to pay dividends next year. If the firm decided not to pay dividends at all next year and pay $1.50 per share the following year, and grow at 5% per year indefinitely after that, a. What is the effect on the price of stock from its baseline practice of increasing dividends per share by 5% per year indefinitely? The price drops by 6% i. ii. The price drops by 11% iii. iv. The price drops by 14.20% The price drops by 16% v. The price drops by 16.55% b. What is the dividend yield? i. 0% ii. 5% iii. 6% iv. 11% c. What is the expected capital gains yield? i. 0% ii. 5% iii. 6% iv. 11% d. What is the expected price per share next year? i. $31.50 ii. $30.00 iii. $25.00 iv. $13.64 v. $26.25