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BlueBird Enterprises expects dividends to grow at 25% per year during the next 2 years, 15% during the 3rd year, 5% during year 4 and

  1. BlueBird Enterprises expects dividends to grow at 25% per year during the next 2 years, 15% during

    the 3rd year, 5% during year 4 and then will start declining at 5% per year indefinitely. Stock is currently selling for $28.85 per share, and the required rate of return is 12%.

    1. What is the projected dividend for the coming year? 2. If you buy the stock 4 years from today and sell it after keeping for one year what will be

    the dividend yield, capital gain yield, and the total yield?

  2. Elgoog Technologies Limited (ETL) predicts that the companys earnings and dividends will continue

    to grow at 16% per year for ___ years, and after that growth will level off at 5% for the indefinite future. ETL has just paid a dividend of $2 per share and the required rate of return on ETL stock is 16%. If ETL stock is currently trading at $41.09 per share, then how many years of 16% per year growth is the market predicting?

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