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Assume that TechnoCo is a constant growth company whose last dividend (D0 , which was paid yesterday) was $2.00 and whose dividend is expected to
Assume that TechnoCo is a constant growth company whose last dividend (D0 , which was paid yesterday) was $2.00 and whose dividend is expected to grow indefinitely at a 6% rate. The appropriate (required) rate of return for TechnoCo stock is 16%.
What are
1) the expected dividend yield
2) the capital gains yield
3) the total return during the first year?
Assume that TechnoCos stock is currently selling at $21.20. What is the expected rate of return on the stock?
What would the stock price be if its dividends were expected to have zero growth?
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