Price at the end of year 5 = 3.85(1.04)/(13%-4%)
= $44.49
Stock Price today = 2.28/(1.13) + 2.6/(1.13)^2 + 2.96/(1.13)^3 + 3.38/(1.13)^4 + 3.85/(1.13)^5 + 44.49/(1.13)^5
= $34.42
Dividend yield = Expected Dividend/Current Price
= 2.28/34.42
= 6.62%
Capital gains yield = 6.38%
Total return = 13%
D6/P5 = 4.004/44.49
= 9%
Capital Gains Yield = 4%
Total Return = 13%
problems b and c Assume that it is now January 1, 2020. Wayne-Martin Electric Inc. (WME)...
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