$5.$ Constant growth stocks

Super Carpeting Inc. $($SCI$)$ just paid a dividend $($D$)$ of $$2\mathrm{.}40$ per share, and its annual dividend is expected to grow at a constant rate $($g$)$ of $5\mathrm{.}00\%$ per year. If the required return $($rs

$)$ on SCI$$s stock is $12\mathrm{.}50\%,$ then the intrinsic value of SCI$$s shares is per share.

Which of the following statements is true about the constant growth model?

The constant growth model can be used if a stock$$s expected constant growth rate is more than its required return.

The constant growth model can be used if a stock$$s expected constant growth rate is less than its required return.

Use the constant growth model to calculate the appropriate values to complete the following statements about Super Carpeting Inc.:

$$ If SCI$$s stock is in equilibrium, the current expected dividend yield on the stock will be per share.

$$ SCI$$s expected stock price one year from today will be per share.

$$ If SCI$$s stock is in equilibrium, the current expected capital gains yield on SCI$$s stock will be per share.