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Consider Consider four different stocks, all of which have a required return of 17% and a most recent dividend of $4.50 per share. Stocks W,
Consider Consider four different stocks, all of which have a required return of 17% and a most recent dividend of $4.50 per share. Stocks W, X, and Y are expected to maintain constant growth rates in dividends for the foreseeable future of 10%, 0%, and 25% per year, respectively. Stock Z is a growth stock that will increase its dividend by 20% for the next two years and then maintain a constant 12% growth rate thereafter.
Calculate dividend yield and capital yield for all 4 stocks.
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