Given No Change in Required Returns, the Price of a Stock

question 298

Multiple Choice

Given no change in required returns, the price of a stock whose dividend is constant will:

• A) Increase over time at a rate of r%.
• B) Decrease over time at a rate of r%.
• C) Increase over time at a rate equal to the dividend growth rate.
• D) Decrease over time at a rate equal to the dividend growth rate.
• E) Remain unchanged.

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Definitions:

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