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Which of the Following Statements Is Correct

Question 32

Multiple Choice

Which of the following statements is correct?


A) The dividend yield on a constant growth stock must be equal to the stock's expected total return less its expected capital gains return.
B) A stock's dividend yield can never exceed its expected growth rate.
C) A required condition for one to use the constant growth model is that the stock's expected growth rate exceeds its required rate of return.
D) Other things held constant, the higher a company's beta coefficient, the lower its required rate of return.

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