Multiple Choice
Which of the following statements is CORRECT,assuming stocks are in equilibrium?
A) The dividend yield on a constant growth stock must equal its expected total return minus its expected capital gains yield.
B) Assume that the required return on a given stock is 13%.If the stock's dividend is growing at a constant rate of 5%,then its expected dividend yield is 5% as well.
C) A stock's dividend yield can never exceed its expected growth rate.
D) A required condition for one to use the constant growth model is that the stock's expected growth rate exceed its required rate of return.
E) Other things held constant,the higher a company's beta coefficient,the lower its required rate of return.
Correct Answer:

Verified
Correct Answer:
Verified
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