A broker offers to sell you shares of Bay Area Healthcare, which just paid a dividend of

Question:

A offers to sell you shares of Bay Area Healthcare, which just paid a of $2 per share. The is expected to grow at a constant rate of 5 percent per year. The stock’s required rate of return is 12 percent.
(a) What is the expected dollar over the next three years?
(b) What is the current value of the stock and the expected stock price at the end of each of the next three years?
(c) What is the expected yield and capital gains yield for each of the next three years?
(d) What is the expected total return for each of the next three years?
(e) How does the expected total return compare with the required rate of return on the stock? Does this make sense? Explain your answer?

Broker
A broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...