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Hello - can I please have help understanding the steps to the following: A share of stock has a dividend that is expected to grow
Hello - can I please have help understanding the steps to the following:
A share of stock has a dividend that is expected to grow at a constant perpetual rate.
During the next year (t=0 to t=1), the dividend yield is expected to be 6.8%.
The capital gain yield for the next year is expected to be 1.88%?.
Dividends are paid at year's end.
If the dividend to be paid at the end of the year (at t=1) is expected to be $2.55, what is a fair price for the stock today (t=0)?
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