Stock X Has the Following Data

question 17

Multiple Choice

Stock X has the following data. Assuming the stock market is efficient and the stock is in equilibrium, which of the following statements is CORRECT? Expected dividend, D1 $3.00 Current Price, P0 $50 Expected constant growth rate 6.0%

• A) The stock's required return is 10%.
• B) The stock's expected dividend yield and growth rate are equal.
• C) The stock's expected dividend yield is 5%.
• D) The stock's expected capital gains yield is 5%.
• E) The stock's expected price 10 years from now is $100.00.

---

Definitions:

Kinship

A social bond based on common ancestry, marriage, or adoption that forms an intricate network of relationships within societies.

Porcelain

Extremely fine, hard, white ceramic. Unlike stoneware, porcelain is made from a fine white clay called kaolin mixed with ground petuntse, a type of feldspar. True porcelain is translucent and rings when struck.

Terracotta

A type of earthenware clay used in pottery and sculpture, characterized by its brownish-orange color after firing.

Earthenware

Pottery made of clay that is fired at low temperatures and is slightly porous. Also, clay figurines and statues produced in the same manner.