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Johnson Catering Corporation will pay a $2.65 per share dividend next year. The company pledges to increase its dividend by 4.75 percent per year, indefinitely. If you require a return of 11 percent on your investment, how much will you pay for the company's stock today?

2. Calculating Returns: Suppose a stock had an initial price of $75 per share, paid a dividend of $1.20 per share during the year, and had an ending share price of $86.
a. Compute the percentage total return.
b. Compute the dividend yield.
c. Compute the capital gains yield

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