Question: (Need help with Parts B and C) Reizenstein Technologies (RT) has just developed a solar panel capable of generating 200% more electricity than any solar
(Need help with Parts B and C)
Reizenstein Technologies (RT) has just developed a solar panel capable of generating 200% more electricity than any solar panel currently on the market. As a result, RT is expected to experience a 18% annual growth rate for the next 5 years. By the end of 5 years, other firms will have developed comparable technology, and RT's growth rate will slow to 6% per year indefinitely. Stockholders require a return of 11% on RT's stock. The most recent annual dividend (D0), which was paid yesterday, was $2.90 per share.
a. Calculate RT's expected dividends for t = 1, t = 2, t = 3, t = 4, and t = 5. Do not round intermediate calculations. Round your answers to the nearest cent. (I already answered this part, just providing it for context...I believe the answers are right.
D1 = $3.42
D2 = $4.04
D3 = $4.76
D4 = $5.62
D5 = $6.63
B. Calculate the expected dividend yield (D1/ P0 ), the capital gains yield expected during the first year, and the expected total return (dividend yield plus capital gains yield) during the first year. (Assume that P0 = P0, and recognize that the capital gains yield is equal to the total return minus the dividend yield.). Round your answers to two decimal places. Don't round intermediate computations.
Expected dividend yield = ??? %
Capital gains yield = ??? %
Expected total return = ??? %
Also calculate these same three yields for t = 5 (e.g., D6/ P5 ). Round your answers to two decimal places. Do not round your intermediate computations.
Expected dividend yield = ??? %
Capital gains yield = ??? %
Expected total return = ??? %
Please & Thank you.
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