New England Quidditch Supply (NEQS) is expected to pay a $12 dividend in one year. What is the expected capital gain rate for the first year if you expect NEQS's dividend to grow by 4% per year forever and the equity cost of capital is 9%? (express as a %: x%)

New England Quidditch Supply (NEQS) is expected to pay a $12 dividend in one year. What is the expected capital gain rate for the first year if you expect NEQS's dividend to grow by 4% per year forever and the equity cost of capital is 9%? (express as a %: x%)

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 27SP: Start with the partial model in the file Ch07 P27 Build a Model.xlsx on the textbook’s Web site....

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