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(4 marks) Show all work. Answers with no work shown will receive no marks. ABC Corp's common stock dividends grow at a constant rate of
(4 marks) Show all work. Answers with no work shown will receive no marks. ABC Corp's common stock dividends grow at a constant rate of 7% per year, and are expected to do so, indefinitely. The rate of return offered by the market on similar stocks is 9%. If the price of a share of ABC Corp. is $10 four years from now: a. What is the dividend that will be paid five years from now? (What is D5 ?) b. What is the price of a share of ABC, two years from now? c. What is the equation for capital gain yield? What is the capital gain yield on shares of ABC
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