A) Suppose a company is going to grow very, very rapidly for the next 3 years: 150% per year. Then it will drop to 70% a year for three years before going to a constant rate of 4%. Using Supernormal growth valuation techniques, what would be the last dividend you would need to calculate in order to proceed to the next step.

D6

D5

D3

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D7

B) Suppose a company just paid a dividend of $1.50. It is expected to increase its dividend by 2% per year forever. If the market requires a return of 9% on assets of this risk level, what is the dividend yield? (answer in decimal format and round to the nearest 0.000.)