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i . Finally, assume that Bon Temps's earnings and dividends are expected to decline at a constant rate of 4 % per year, that is

.

Finally, assume that Bon Temps's earnings and dividends are expected to decline at a

constant rate of

4 %

per year, that is

, g = - 4 % .

Why would anyone be willing to buy such a

stock, and at what price should it sell? What would be its dividend and capital gains

yields in each year?

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