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You purchase a share of Cable Bahamas stock for $19.50. You expect it to pay a dividend of $1.06, $1.1236, $1.1910 in Years 1, 2

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You purchase a share of Cable Bahamas stock for $19.50. You expect it to pay a dividend of $1.06, $1.1236, $1.1910 in Years 1, 2 and 3, respectively, and you expect to sell if at a price of 23.22 at the end of 3 years. a. Calculate the growth rate in dividends. (3) (3) b. Calculate the expected dividend yield. Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is the stock's expected total rate of return (assume the market is in equilibrium with the required return equal to the expected return)

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