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WME's growth rate will slow to 5% per year indefinitely. Stockholders require a return of 13% on WME's stock. The most recent annual dividend (Do),

image text in transcribed WME's growth rate will slow to 5% per year indefinitely. Stockholders require a return of 13% on WME's stock. The most recent annual dividend (Do), which was paid yesterday, was $1.50 per share. a. Calculate WME's expected dividends for 2022, 2023, 2024, 2025, and 2026. Do not round intermediate calculations. Round your answers to the nearest cent. D2022=$ D2023=$ D2024=$ D2025=$ D2026=$ must use the dividend expected in 2027 , which is 5% greater than the 2026 dividend. Do not round intermediate calculations. Round your answer to the nearest cent. D1/P0= Capital gains yield =% Expected total return =% Then calculate these same three yields for 2027. Do not round intermediate calculations. Round your answers to two decimal places. D6/P5= I. It is of no interest to investors whether they receive dividend income or capital gains income, since both types of income are always taxed at the same rate. The firm's stock is "mature" at the end of 2026. II. It is of no interest to investors whether they receive dividend income or capital gains income, since taxes on both types of income must be paid in the current year. The firm's stock is "mature" at the end of 2026. III. It is of no interest to investors whether they receive dividend income or capital gains income, since taxes on both types of income can be delayed until the stock is sold. The firm's stock is "mature" at the end of 2026. IV. People in IV. People in high-income tax brackets will be more inclined to purchase "growth" stocks to take the capital gains and thus delay the payment of taxes until a later date. The firm's stock is mature" at the end of 2026 . V. Some investors need cash dividends, while others would prefer growth. Investors must pay taxes each year on the capital gain during the year, while taxes on the dividends can be delayed until the stock is sold. The I. As the required return increases, the price of the stock goes down, but both the capital gains and dividend yields increase initially. II. As the required return increases, the price of the stock goes down, but both the capital gains and dividend yields decrease initially. III. As the required return increases, the price of the stock goes up, and both the capital gains and dividend yields increase initially. IV. As the required return increases, the price of the stock goes up, and both the capital gains and dividend yields decrease initilly. IV. As the required return increases, the price of the stock goes up, and both the capital gains and dividend yields decrease initially. V. As the required return increases, the price of the stock remains the same since both the capital gains and dividend yields remain constant

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