Question
Taussig Technologies Corporation (TTC) has been growing at a rate of 20% per year in recent years. This same growth rate is expected to last
Taussig Technologies Corporation (TTC) has been growing at a rate of 20% per year in recent years. This same growth rate is expected to last for another 2 years, then decline to gn = 5%. If D0 = $2.60 and rs = 13%. Stock worth today is $44.18, the expected dividend yield at this time (during year 1) is 7.06%, and Capital gains yields at this time are 5.94%. What will TTC's dividend and capital gains yields be once its period of supernormal growth ends? (Hint: These values will be the same regardless of whether you examine the case of 2 or 5 years of supernormal growth; the calculations are very easy.) Round your answers to two decimal places. Dividend yield: ____% Capital gains yield: ____%
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