Consider four different stocks, all of which have a required return of 12 percent and a most recent dividend of $3.00 per share. Stocks W, X, and Y are expected to maintain constant growth rates in dividends for the foreseeable future of 10 percent, 0 percent, and –4 percent per year, respectively. Stock Z is a growth stock that will increase its dividend by 20 percent for the next two years and then maintain a constant 10 percent growth rate thereafter.

What is the dividend yield for each of these four stocks?

What is the expected capital gains yield for each of these four stocks?