4. 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 price is $30 a share. The stocks required rate of return is 12%. What is the expected capital gains yield at the end of the third year?

Choice: 2.5%

Choice: 5.0%

Choice: 7.5%

Choice: $30 at end of year