If a stock's dividend is expected to grow at a constant rate of 5% a year,which of the following statements is correct?
A) The expected return on the stock is 5% a year.
B) The stock's dividend yield is 5%.
C) The stock's required return must be equal to or less than 5%.
D) The stock's price 1 year from now is expected to be 5% above the current price.
Correct Answer:
Verified
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