Question: Finally, assume that Bon Tempss earnings and dividends are expected to decline at a constant rate of 6% per year, that is, g = 6%.

Finally, assume that Bon Temps’s earnings and dividends are expected to decline at a constant rate of 6% per year, that is, g = 6%. Why would anyone be willing to buy such a stock, and at what price should it sell? What would be its dividend and capital gains yields in each year?

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