Dividend Yield =PriceDividend100, DIV 1=DIV0(1+g),P0=rgDIV1 1. If R=1+r1+g, then (1+r)(1R)1=(1+r)(11+1+)1 (1+r)(1R)1=1+r(1+)1=1 2. (a) If DIV0=$10,g=0.2 (growth of dividends is 20% ), what is DIV1 ? DIV1= (b) If price =$60, the dividend yield right now =Price0DIV0= (c) Now we find ' r ', P0=60=rgDIV 3. (a) If DIV1=$15,g=0.5 (growth of dividends is 50% ), what is DIV0 ? Note formulae will not be provided here on the test. We use DIV1=DIV0(1+g) (b) The dividend yield is after year 1 is 10%. Then the price is: Dividend Yield =PriceDividend100=10 4. (a) If DIV0=$2=DIV1=DIV2= and r=10%, then P0= (b) If DIV0=$2, and g=0.10(10%), then DIV1= P0=DIV1/(rg). If r=15%, then P0=