Merge & Center aste Formatting Table - St Styles Number For Alignment board Suppose that...
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Merge & Center aste Formatting Table - St Styles Number For Alignment board Suppose that a firm is expected to pay a dividend of $2 next year. Thereafter, the nominal dividend grow 5 G H D 3 Suppose that a firm is expected to pay a dividend of $2 next year. Thereafter, the nominal dividend growth rate is expected to be 8% for four years and then it will be 3% per year forever. The annual nominal discount rate is 12% and the inflation rate is expected to be 2% annually. Answer the following questions What is the expected nominal capital gains yield on the stock from the end of year 3 to the end of year 4? Cap gain b What is the expected real (total) return on the stock in year 4 (i.e., from the end of year 3 to the end of year 4)? Real return
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