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Given: use Excel and show formula/step used Company pays a dividend of $1.60 per share. Company expected to grow at a constant rate of 6.5%

Given: use Excel and show formula/step used
Company pays a dividend of $1.60 per share.
Company expected to grow at a constant rate of 6.5% per year.
RRR: 13%
g: 6.5%
Do: $ 1.60
Part A) Determine Expected dividend each year for the next 3 years:
Year 1:
Year 2:
Year 3:
Part B) Determine the following four Stock Prices:
Equation: Po = Do * (1+g)/(r -g )
Stock Price currently: Po:
Stock Price one year from now: or P1
Stock Price two years from now: or P2:
Stock Price three years from now: or P3:
Part C) Determine for Years 1 and 2 the Expected Yields:
Year 1: Expected dividend yield: D1/Po:
Expected capital gains yield: P1 - Po/Po:
Year 2: Expected dividend yield: D2/P1:
Expected capital gains yield: P2 - P1/P1:

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