Question: Consider a stock that is expected to pay $2 dividends next year, $3 dividends in 2 years, $4 dividends in 3 years, and, after that,

Consider a stock that is expected to pay $2 dividends next year, $3 dividends in 2 years, $4 dividends in 3 years, and, after that, the dividends are expected to grow at a constant rate of 6% per year forever. The stock's required return is 14%. Find the capital gain yield (rounded to the nearest percent) during the first year.

14%

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