A Firm's stock is trading for $50 per share. Next year you expect it to pay a $2 dividend, and dividends have been growing at a 6% rate. a. What rate of return do investors require from this stock? b. What is the dividend yield? c. What is the capital gain yield?

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A Firm's stock is trading for $50 per share. Next year
you expect it to pay a $2 dividend, and dividends have
been growing at a 6% rate.
a. What rate of return do investors require from this
stock?
b. What is the dividend yield?
c. What is the capital gain yield?
Transcribed Image Text:A Firm's stock is trading for $50 per share. Next year you expect it to pay a $2 dividend, and dividends have been growing at a 6% rate. a. What rate of return do investors require from this stock? b. What is the dividend yield? c. What is the capital gain yield?
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