Suppose that you estimate that LOHI Corp. will skip its next three annual dividends, but then resume paying a dividend,

Suppose that you estimate that LOHI Corp. will skip its next three annual dividends, but then resume paying a dividend, with the first dividend paid to be equal to $1.00. If all subsequent dividends will grow at a constant rate of 6 percent per year and the required rate of return on LOHI is 14 percent per year, what should be its price? a. $6.35 b. $8.44 c. $10.37 d. $12.50 Continuing the previous problem, what is LOHI’s expected capital gains yield over the next year? a. 10.34% b. 11.85% c. 12.08% d. 14.00%

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