Question: (4 marks) Show all work. Answers with no work shown will receive no marks. ABC Corp's common stock dividends grow at a constant rate of

(4 marks) Show all work. Answers with no work shown will

(4 marks) Show all work. Answers with no work shown will receive no marks. ABC Corp's common stock dividends grow at a constant rate of 7% per year, and are expected to do so, indefinitely. The rate of return offered by the market on similar stocks is 9%. If the price of a share of ABC Corp. is $10 four years from now: a. What is the dividend that will be paid five years from now? (What is D5 ?) b. What is the price of a share of ABC, two years from now? c. What is the equation for capital gain yield? What is the capital gain yield on shares of ABC

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