Problem 7-20 Nonconstant Growth Stock Valuation Reizenstein Technologies (RT) has just developed a solar panel capable of generating 200% more electricity than any solar panel currently on the market. As a result, RT is expected to experience a 19% annual growth rate for the next 5 years. By the end of 5 years, other firms will have developed comparable technology, and RT's growth rate will slow to 7% per year indefinitely. Stockholders require a return of 10% on RT's stock. The most recent annual dividend (D0), which was paid yesterday, was $2.65 per share.

Calculate the expected dividend yield (D1/ ), the capital gains yield expected during the first year, and the expected total return (dividend yield plus capital gains yield) during the first year. (Assume that = P0, and recognize that the capital gains yield is equal to the total return minus the dividend yield.). Round your answers to two decimal places. Do not round your intermediate computations.

Expected dividend yield %

Capital gains yield %

Expected total return %

Also calculate these same three yields for t = 5 (e.g., D6/ ). Round your answers to two decimal places. Do not round your intermediate computations. Expected dividend yield % Capital gains yield % Expected total return %