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A firm is expecting a: • $4 dividend to be paid to shareholders in one year (t=1); • $6 dividend the year after (t=2); and from then on the • 2% inflation rate is the expected growth rate of the annual dividend which will be paid annually forever; • 10% pa required return on equity. P Flag question All returns and cash flows are given as nominal figures. Which of the following statements is NOT correct? a. The capital return in the first year is 4.43% from time zero to just after the first dividend payment. O b. The dividend return in the first year is 8.00% C. The price in one year from now (t=1), just after the $4 dividend is paid is $75.00 O d. The price today is $71.82 e. The real growth in the annual dividend after year 2 is 0%