The next dividend payment by Im, Incorporated, will be \( \$ 2.70 \) per share. The dividends are anticipated to maintain a growth rate of 6.75 percent forever. Assume the stock currently sells for \( \$ 49.00 \) per share. a. What is the dividend yield? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16 . b. What is the expected capital gains yield? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16 .

1. Define the variables: - Next dividend, \( D_1 = \$2.70 \) - Current stock price, \( P_0 = \$49.00 \) - Dividend growth rate, \( g = 6.75\% = 0.0675 \) 2. Calculate the dividend yield using the formula: \[ \text{Dividend Yield} = \frac{D_1}{P_0} \] Substitute the values: \[ \text{Dividend Yield} = \frac{2.70}{49.00} \approx 0.05510204 \] Converting to a percentage: \[ 0.05510204 \times 100 \approx 5.51\% \] 3. The expected capital gains yield for a stock with dividends growing at a constant rate is equal to the growth rate: \[ \text{Capital Gains Yield} = g = 6.75\% \] 4. Final Answers: - Dividend Yield: \( 5.51\% \) - Expected Capital Gains Yield: \( 6.75\% \)