8- A company just paid an annual dividend of $1.5 per share. You, as an analyst, predict that the dividend will grow at 20% for the next 2 years and then 5% forever. With a required return of 10% and a market in equilibrium, what is the capital gains yield in Yr 1?

a) 10%

b) 5.6%

c) 3.4%

d) 20%

9- A company just paid an annual dividend of $1.5 per share. You, as an analyst, predict that the dividend will grow at 20% for the next 2 years and then 5% forever. With a required return of 10% and a market in equilibrium, what is the dividend yield in Yr 1?

a) 3.4%

b) 5.6%

c) 10%

d) 4.4%

10- A company just paid an annual dividend of $1.5 per share. You, as an analyst, predict that the dividend will grow at 20% for the next 2 years and then 5% forever. With a required return of 10% and a market in equilibrium, what is the total return in Yr 1?

a) 9%

b) 5%

c) 10%

d) 20%