The table below shows three different shares and their respective expected growth rates. All of these shares have a required return of 19% and a most recently paid dividend of $2.4 per share.

Share, Expected growth rates, g

K 8%

L 0%

M -5%

a. Calculate the dividend yield for each of these shares. Clearly display the formula, relevant values and final answer. b. Calculate the expected capital gains yield for each share. Clearly display the formula, relevant values and final answer.

c. Discuss the relationship among the various returns calculated in (a) and (b). Use relevant figures for illustration.