Questions 9 and 10 use the following setup.

The stock of Fama Corp. just paid a dividend of $2.5 today. The company promises that the dividend of next year will be $2.55 next year. And, the dividend growth rate is expected to remain at the current level. Suppose the required rate of return of the stock is 12%.

What is the dividend yield for the stock?

What is the intrinsic value of its stock today?