Now suppose that Temp Forces earnings and dividends are expected to decline by a constant 6% per

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Now suppose that Temp Force’s earnings and dividends are expected to decline by a constant 6% per year forever—that is, g = −6%. Why would anyone be willing to buy such a stock, and at what price should it sell? What would be the dividend yield and capital gains yield in each year?

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Corporate Finance A Focused Approach

ISBN: 978-1439078082

4th Edition

Authors: Michael C. Ehrhardt, Eugene F. Brigham

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