Stock XYZ has a current dividend of $6.00 . The dividend is expected to grow at 4.00% per year until year 3 and then at 3.00% per year for the rest of time.
Based on the riskiness XYZ, its discount rate is 7.00% . With this information, what is the dividend yield from today to year 1?
7.00%
3.73%
4.00%
4.12%
3.93%
3.07%