8)

The capital gain yield for a stock in the constant dividend growth model is equal to:

A)		r
B)		g
C)		D1 / P0
D)		r g

9) A company is expected to pay their first annual dividend 2 years from now. That payment will be $1.50 a share. Starting in Year 3, the company will increase the dividend by 5% per year. The required return from common shareholders is 10%. What is the estimated value of this stock today?

	A)	$22.10
	B)	$13.04
	C)	$19.28
	D)	$27.27