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Suppose we observe that a stock is selling for $40 per share. The next dividend will be $1 per share, and you think the dividend

  1. Suppose we observe that a stock is selling for $40 per share. The next dividend will be $1 per share, and you think the dividend will grow at 12% per year forever. What is the dividend yield in this case? The capital gain yield? The total required return?

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