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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 dividend is expected to
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 3% per year. The stocks price is $27 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: 3.0% Choice: 5% Choice: $30 at end of year
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