Suppose that D0=$1.00 and the stock's last closing price is $26.25. It is expected that eamings and dividends will grow at a constant rate of g=5.00% per year and that the stock's price will grow at this same rate. Let us assume that the stock is fairly priced, that is, it is in equilibrium, and the most appropriate required rate of return is ri=9.005%. The dividend recelved in period 1 is D1=$1.00(1+0.0500)=$1.05 and the estimated intrinsic value in the same period is based on the constant growth model: P1=riiD2. Using the same logic, compute the dividends, prices, and the present value of each of the dividends at the end of esch periad. The dividend yield for period 1 is and it will each period. The capital gain vield expected during period 1 is and it will each period. If it is forecasted that the total retum equals 9.00% for the next 5 years, what is the forecasted total return out to infinity? 4.00% 5.00% The dividend yield for period 1 is and it witl each period. The capital gain yield expected during period 1 is and it will each period. If it is forecasted that the total return equals 9.00% for the next 5 years, what is the forecasted total retum out to infinity? expected total return is equal to the required rate of return rx. If the market was more optimistic and the growth rate would be 6.00% rather than 5.00%, the stock's forecasted intrinsic value would be P0=a000000000031.08=$35.00, which is greater than $26.25. In this case, you would call the stock a "Buy". Suppose that the growth rate is expected to be 3.00\%. In this case, the stock's forecasted intrinsic value would be price, and the stock would be al