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A stock with a price of $400 is expected to pay a $8 dividend next year. This dividend is expected to increase by 4% indefinitely.

A stock with a price of $400 is expected to pay a $8 dividend next year. This dividend is expected to increase by 4% indefinitely. What is the expected capital gains yield of the stock?

a.

2.00%

b.

8.00%

c.

4.00%

d.

12.00%

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