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Assume that McGill Inc. is expected to experience supernormal growth of 25 percent for the next 2 years, followed by 15 percent for the year

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Assume that McGill Inc. is expected to experience supernormal growth of 25 percent for the next 2 years, followed by 15 percent for the year after, and then to return to its long-run constant growth rate of 4 percent. McGill Inc. most recent dividend was $1.25. The investor's required rate of return is 11%. (a) Calculate the current price of the stock. (10 POINTS) (b) What is the expected dividend yield and capital gains yield in Year 1 ? (5 POINTS) (c) What is the expected dividend yield and capital gains yield in Year 4? (5 POINTS)

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