Use the information for the​ question(s) below. Von Bora Corporation is expected to pay a dividend of​ $1.40 per share a

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Use the information for the​ question(s) below.
Von Bora Corporation is expected to pay a dividend
of​ $1.40 per share at the end of this year and a​ $1.50
per share at the end of the second year. You expect
Von​ Bora's stock price to be​ $25.00 at the end of two
years. Von​ Bora's equity cost of capital is​ 10%.
Suppose you plan on purchasing Von Bora stock in one​ year,
right after the​ $1.40 dividend is paid. You then plan on
selling your stock at the end of year​ two, right after
the​ $1.50 dividend is paid. The capital gain rate that you
will receive on your investment is closest​ to:
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Part 1
A.
​3.50%.
B.
​4.00%.
C.
​6.25%.
D.
​3.75%.