5. Answer the following questions regarding dividend discount models:

b. What is the general formula to calculate the capital gains yield and the dividend yield of a stock

(one that holds when firm's dividends are growing at a constant rate and when they are not)?

c. Write out and explain the dividend discount model formula for a constant growth stock. What is

the capital gains yield and dividend yields for a constant growth stock?

d. How does one calculate the capital gains yield and the dividend yield of a non-constant growth

stock during the time period over which dividends grow at a non-constant rate?

e. What is the relationship between stocks' total expected return and capital gains yield for a new

growth stock that is paying no dividends?

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