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Business, 05.11.2019 06:31 fatherbamboo

Astock is expected to pay a year-end dividend of $2.00, i. e., d1 = $2.00. the dividend is expected to decline at a rate of 5% a year forever (g = −5%). if the company is in equilibrium and its expected and required rate of return is 15%, which of the following statements is correct? a. the company's dividend yield 5 years from now is expected to be 10%.b. the constant growth model cannot be used because the growth rate is negative. c. the company's expected capital gains yield is 5%.d. the company's expected stock price at the beginning of next year is $9.50.e. the company's current stock price is $20.

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Astock is expected to pay a year-end dividend of $2.00, i. e., d1 = $2.00. the dividend is expected...
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