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A broker offers to sell you shares of Bay Area Healthcare, which just paid a dividend of $2 per share. The stocks price is $30

A broker offers to sell you shares of Bay Area Healthcare, which just paid a dividend of $2 per share. The stocks price is $30 a share. The dividend is expected to grow at a constant rate of 5% per year. The stocks required rate of return is 12%. What is the expected total return yield (this is the expected dividend yield + expected capital gains yield) for each of the next three years?

a. 10%

b. 14%

c. 12%

d. 8%

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