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Chomp Champ Inc. is experiencing rapid growth. Dividends are expected to grow at 3 0 % for the next 3 years, 2 0 % over

Chomp Champ Inc. is experiencing rapid growth. Dividends are expected to grow at 30% for the next 3
years, 20% over the following year, and then 6% per year indefinitely. The required rate of return on this
stock is 18% and the stock currently sells for $42.50 per share.
(a) What is the projected dividend for the coming year? (10 POINTS)
(b) What is the expected dividend yield and capital gains yield in Year 1?(10 POINTS)

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