Previous Information:

IBX stock dividend is expected to be $3.50 at the end of the year, and is expected to grow at 7.5% annually, forever. If the ROR of IBX stock is 15.25% per year, what is its intrinsic value?

= 45.16

If IBX stock market price is equal to its intrinsic value, what is next years expected price?

= 48.55

If an investor were to buy IBX stock now and sell it after receiving the $2.15 dividend a year from now, what is the expected capital gain in percentage terms?

= 7.49%

Question 1: What is the dividend yield?

a. 7.02% b. 11.84% c. 9.83% d. 8.86%

Question 2: What is the holding period return?

a. 17.33% b. 24.52% c. 10.00% d. 5.25%