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Title: If a stockís dividend is expected to grow at a constant rate of 5% a year, which of the following statements is CORRECT?

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Q:

If a stock’s dividend is expected to grow at a constant rate of 5% a year, which of the following statements is CORRECT? The stock is in equilibrium.

a. The expected return on the stock is 5% a year.

b. The stock’s dividend yield is 5%.

c. The price of the stock is expected to decline in the future.

d. The stock’s required return must be equal to or less than 5%.

 

E. The stock’s price one year from now is expected to be 5% above the current price.


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Title: If a stockís dividend is expected to grow at a constant rate of 5% a year, which of the following statements is CORRECT?

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    • Posted Date: Oct 24, 2013 at 7:24:14 AM

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A:
...e stock’s price one year from now is expected to be 5% above the current price....
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