Suppose Temp Force is expected to experience zero growth during the first 3 years and theme to resume its steady-state growth of 6% in the fourth year. What is the stock’s value now? What is its expected dividend yield and its capital gains yield in Year 1? In Year 4?

Sam Strother and Shawna Tibbs are senior vice presidents of Mutual of Seattle. They are co-directors of the company’s pension fund management division, with Strother having responsibility for fixed income securities (primarily bonds) and Tibbs being responsible for equity investments. A major new client, the Northwestern Municipal League, has requested that Mutual of Seattle present an investment seminar to the mayors of the represented cities, and Strother and Tibbs, who will make the actual presentation, have asked you to help them.