The Expected Rate of Return on the Common Stock of Northwest

Multiple Choice

The expected rate of return on the common stock of Northwest Corporation is 14 percent. The stock's dividend is expected to grow at a constant rate of 8 percent a year. The stock currently sells for $50 a share. Which of the following statements is most correct?

A) The stock's dividend yield is 8 percent.
B) The stock's dividend yield is 7 percent.
C) The current dividend per share is $4.00.
D) The stock price is expected to be $54 a share in one year.
E) The stock price is expected to be $57 a share in one year.