Question: Problem 15: In the next 4 years ABC is expected to pay the following stream of dividends: D1=$5, D2=$3, and D3=$6, D4=$8 After that the

Problem 15: In the next 4 years ABC is expected to

Problem 15: In the next 4 years ABC is expected to pay the following stream of dividends: D1=$5, D2=$3, and D3=$6, D4=$8 After that the dividends are expected to grow at a constant rate of 5% per year indefinitely. The required rate of return is R=12% A) Find the current stock price B) Find the capital gain yield in the first year C) Find the dividend yield in the 7th year

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