Dividend yield and the capital gains yield for first year

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Conroy Consulting Corporation (CCC) has been growing at a rate of 30% per year in recent years. This same nonconstant growth rate is expected to last for another 2 years. You are also given that D0 = $2.50, and the growth rate after 2 years will be constant at 7%. The beta on firm’s stock is 2, the risk-free rate is 2%, and the market risk premium is 5%. In class, we solved for the expected dividend yield and the capital gains yield for the first year (from now to the end of this upcoming this) using the discounted dividend approach. Now, solve for the expected dividend yield and the capital gains yield for the second year (The second year starts from one year from today and ends two years from today).

Reference no: EM131354210

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