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A company plans to pay no dividends until 4 years from now. At that point, the company will pay a dividend of $2 (i.e. D4=$2).
A company plans to pay no dividends until 4 years from now. At that point, the company will pay a dividend of $2 (i.e. D4=$2). In 5 years, the company will pay a dividend of $3 (i.e. D5=$3). After that, dividends will increase by 5% per year forever. The required return on the stock is 10%. What is the stock's dividend yield in 10 years?
a. 10%
b. 0%
c. 5%
d. impossible to determine
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