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Problem 8 - 3 2 Capital Gains versus Income [ LO 1 ] Consider four different stocks, all of which have a required return of

Problem 8-32 Capital Gains versus Income [LO1]
Consider four different stocks, all of which have a required return of 20 percent and a
most recent dividend of $5.00 per share. Stocks W,x, and Y are expected to maintain
constant growth rates in dividends for the foreseeable future of 10 percent, 0 percent,
and -5 percent per year, respectively. Stock Z is a growth stock that will increase its
dividend by 20 percent for the next two years and then maintain a constant 10 percent
growth rate thereafter. What is the dividend yield and capital gains yield for each of
these four stocks? (Leave no cells blank - be certain to enter "O" wherever required. A
negative answer should be indicated by a minus sign. Do not round intermediate
calculations and enter your answers as a percent rounded to 1 decimal place, e.g.,
32.1.)
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