Problem THREE

Expected Growth for the NEXT TWO (2) years 16.0000%

Expected Growth in the THIRD (3) year 10.0000%

Constant Growth in Year FOUR (4) and thereafter 4.0000%

LAST dividend PAID $2.85

REQUIRED rate of return 7.0000%

USING TIMELINE 0 TO 4 YEARS

- CALCULATE the $VALUE of the STOCK as of TODAY

- CALCULATE the DIVIDEND YIELD and CAPITAL GAINS YIELD at TIME 0

- CALCULATE the DIVIDEND YIELD and CAPITAL GAINS YIELD at TIME 3