Assuming g will remain constant,the dividend yield is a good measure of the required return on a common stock under which of the following circumstances? A) g = 0. B) g 0. C) g

Question

Assuming g will remain constant,the dividend yield is a good measure of the required return on a common stock under which of the following circumstances?
A) g = 0.
B) g > 0.
C) g < 0.
D) Under no circumstances.
E) Answers a and b are both correct.

Quizplus · Accepted Answer

When g = 0, the dividend yield alone represents the required return on the stock, as there is no growth component to consider.

Assuming G Will Remain Constant,the Dividend Yield Is a Good