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Company XYZ just paid a dividend of $1 per share. The required return on its stock is 15% (EAR). 1) The annual dividends grow

 

Company XYZ just paid a dividend of $1 per share. The required return on its stock is 15% (EAR). 1) The annual dividends grow at 10% per year over the next three years. Thereafter, dividends will grow at 5% per year. What is the current stock price? What is its dividend yield and capital gain yield? (10 points) 2) Now assume company XYZ actually pays quarterly dividends. The dividends have a constant growth rate of 1% per quarter. What is the stock price? (5 points)

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