Anderson Corp just issued a stock dividend of$2.00 yesterday. The company plans on increasing the dividend by 6% per year for the next 5 years. After which, the dividend will grow at 3% forever. The required rate of return is 10%.
A) Calculate the current price of the stock
B) Calculate what the price of the stock should be in 1 year
C) Calculate the Dividend yield and capital gains yield during the first year.
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Home » Business » Anderson Corp just issued a stock dividend of$2.00 yesterday. The company plans on increasing the dividend by 6% per year for the next 5 years. After which, the dividend will grow at 3% forever. The required rate of return is 10%.