Assume Gilford stock currently trades for $15 per share. One year from today, you expect Gilford to pay a dividend of $0.75 and you expect Gilfords stock to equal $15.50.

1. 1) What dividend yield, Rate of return, and total rate of return do you expect on Gilford stock?

2. 2) Assume Gilford plans to pay a dividend of $0.75 one year from today and that it plans to increase annual dividends at a rate of 5% per year forever. Estimate Gilford current stock price if its equity cost of capital equals 11%.