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Bates, Inc. has just paid a dividend of $3.00 per share. You expect the dividends to grow at 10% per annum for two years. Thereafter,
Bates, Inc. has just paid a dividend of $3.00 per share. You expect the dividends to grow at 10% per annum for two years. Thereafter, you expect the dividend growth to slow to a perpetual 3.5% per annum. If the stock is currently priced to earn you a 9% per annum return, what are the expected dividend yield and capital gains yield for Bates respectively?
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