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a) What is the value of a stock that is expected to pay a constant dividend of $2 per year forever if the required return
a) What is the value of a stock that is expected to pay a constant dividend of $2 per year forever if the required return is 15%?
b) What if the company starts increasing dividends by 4% per year, beginning with the next dividend? The required return stays at 15%.
c) Based on part b, what is the dividend yield and the what is the capital gains yield for this company?
Please show work, no excel.
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